E-9. Narrative for an effective tax administration offer
Use a model narrative to organize special circumstances and supporting evidence for an Effective Tax Administration offer. Acceptance is not guaranteed.
Use this model letter
Copy or download the blank model letter, then replace every [bracketed field] and remove alternatives that do not apply. Read the guidance below before using it. These are templates, not official IRS forms; nothing is filed or sent for you.
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Attach to Form 656 when your reasonable collection potential exceeds the debt but collecting it would cause hardship. This narrative is the case for this kind of offer; it should be specific and every assertion should have a document behind it.
Attachment to Form 656, [your name], SSN ending [digits]: Explanation of circumstances in support of an offer based on effective tax administration
I acknowledge that my reasonable collection potential, computed on Form 433-A (OIC), exceeds the liability of $[amount]. I am requesting acceptance of my offer of $[amount] because collection of the full amount would create economic hardship within the meaning of Treasury Regulation section 301.7122-1(b)(3).
My circumstances. I am [age]. My income is $[amount] per month from [Social Security / pension / other], and it is fixed. My allowable living expenses under the Collection Financial Standards are $[amount] per month, leaving [no / $[amount]] disposable income. My only significant asset is my home at [address], which I have owned since [year], valued at approximately $[amount] with no mortgage.
Why the equity cannot be reached without hardship. I have applied for a home equity loan with [lender] and [lender] and was declined on [dates] for insufficient income; the denial letters are enclosed. A sale of the home would leave me without housing I can afford at my income, [and would require me to leave the community in which my medical providers, family, and support are located]. [If applicable: I have the following medical conditions, documented in the enclosed records, which require [ongoing care / proximity to specific providers].]
How the liability arose. [Example: The liability arose from distributions from my late husband's retirement account in [years], taken to pay for his medical care during his final illness. I was not advised that the distributions were taxable. I filed the returns on time and have filed and paid on time every year since.]
Source of the offered funds. The offered amount of $[amount] is being provided by [family member] as a [gift / loan] and is not otherwise available to me.
I respectfully request that the offer be accepted.
Enclosed: loan denial letters; benefit statements; property tax assessment or appraisal; medical records as described; [other].
[Signature, date]