Private Use of Rental Property

The guidelines associated with the personal and leasing utilization of premises are included in this article in the Landlord’s Tax Guide. This may be either because you are leasing out a space in the same property which you are living in, or you have got a vacation residence that you might privately employ a few weeks out of the calendar year and rent the remainder of the time. This information will not apply to you at all if you never use your rental property for personal use. However, if you do, you will want to keep reading.

Property rented for less than fifteen days. Any time you leased your property for less than fifteen days total in the past year, you don’t have to file any of your rental revenue. If this is the scenario, then the real estate property is going to be considered personal for taxation considerations, and on Schedule A of Form 1040, it is possible to deduct any of the property associated expenditures as personal.

Employing Your Holiday Home as a Part Time Rental

Personal use test. It’s important to work with some type of numeric formula to determine the total number of days during which the rental property was used for personal use. That is the personal use test. How you deduct your rental expenses is going to largely be determined by whether or not the personal use test is satisfied. Finding out the actual quantity of days in the past year in which the real estate property was leased out at fair market value is the initial step in calculating the personal use test. The next step is to multiply that number of days by ten percent. We will label the outcome the “total days rented” or “TDR” for short. The next stage will be to figure out how many days the rental property was employed for private use. We can label this “personal use days” or “PUD” abbreviated. Look at the table below for a vision of the personal use test.

NOTE: “Personal use” consists of use by you, any other owners of the home and property, plus the families of all individuals who own the property, unless of course your family member is paying out rent at fair market value.

If TDR is…

and PUD is…

then the personal use test is…

over 14

less than TDR

not satisfied

under 14

less than 14

not satisfied

over 14

more than TDR


under 14

more than 14



If test is satisfied. If the personal use test is satisfied, you will deduct your rental expenses only to the extent of the rental income. A net rental loss will not be attainable, but when there are any additional expenditures you do not write off this year, they can be moved forward to later years, provided that there is an adequate sum of rental earnings in the tax year in which you claim them.

If test is not satisfied. Your own leasing costs will never be restricted by the rental income if the personal use test is not satisfied. You could deduct your rental costs and also have a net rental loss. There could be a few passive activity rules, however, which may still restrict the rental loss tax deduction.

Computing all of your rental expenditures. A number of expenses should be allocated between leasing and personal application. These include expenditures that will have already been charged no matter the use, such as real estate taxes and mortgage interest. Find out the whole number of personal use days. Then, you will need to determine the total quantity of TDR. After that, divide rental days by the sum of PUD and rental days. The end result is the rental percentage. Finally, you have to multiply the total cost of your expenses by the leasing percentage that you have established, and then the result will be the rental deductible part.

Leasing a Section of Your House

You need to expressly allot all your costs in between private usage and leasing use if you rent out a part of your own personal home. The IRS allows a little versatility with the method you employ; just make sure it’s consistent from year to year. Some people choose the option of taking the number of rooms within their residence along with the number of rooms within the home, and divide them. Dividing the rented sq . ft . by the residence’s total sq . ft . is another option that lots of people go for. You’ll end up with rental costs and personal costs. Those allotted to the leasing income can be deducted as such, and you can use Schedule A of Form 1040 to deduct what’s left.

Bellevue CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has been the owner of his own small business, Seattle CPA firm, Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.

Allowable for Tax Deduction Rental Property Expenses: Insurance, Cleaning/Maintenance, and Repairs

You must determine that all of the services and costs are arranged adequately and fully reported for the objectives of IRS conformity, now that you have chosen to rent out your property for income. In this article, we are going to name a few of these important costs.


Insurance policy payments are pre-paid before the specified period of time. Scenario: You bought an insurance plan for the rental property in March 2012 for $1200. April 2012 to March 31, 2013 is the coverage period of this insurance policy. Because the insurance coverage time period will exceed the present tax year, you must identify the payments pertinent for this present tax year only and carry forward the rest for the next filing period. This could mean that $900 (9 months April to Dec 2012) or $100 per month of qualified rental property use could be the permitted premium.

Note that many Insurance carriers routinely combine insurance premium plans between personal and business clients for a discount rate. Only the company rental property applicable part can be deducted. The individual and non-business related use may be allowable on your individual tax return. You can include Title Insurance in the Cost Basis of the property, as it is not an allowable expense.

Cleaning and Maintenance

If it is used on regular cleaning and repair of commonly used places, then regular upkeep of the rental property can be an allowed expense. Still, the costs will only be deductible if they are not on personal use days, but are on allowed rental hours. To ensure the rental property is in good condition and running order, you can try what many other rental property owners do, and engage a local area contracted service to maintain your rental property. These types of services will give you a number of expert services such as basic upkeep, dusting furniture, washing windows, and cleaning appliances. Major structural improvements and changes are not allowed, so should be covered in the rental property’s Cost Basis.


There are sometimes jobs which don’t require serious reconstruction of the framework of the property like repainting or equipment repair service. Depending on the rental period, it is possible to deduct these kinds of necessary and ordinary expenses.

It is important to be aware that these expenses that are commonly deductible in relation to the income of the property, you cannot include those periods that are deemed private days of use. Just those expenditures that are related to the authorized rental timeframe are permitted.

  • On the IRS’s webpage, you’ll find numerous reports you need. If you need more info, view IRS Publication 527.

Bellevue CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

Leased Property Motor and Local Travel Business Expenses which Are Deductible

If the special travel costs of your own personal automobiles or another local transportation cost are typical, needed, and meet certain criteria, then they can be considered deductible. If you use your personal vehicle to take care of, and operate your rental residence, as well as to collect money from residents, you may write off all of these costs. Note that driving to and from work is considered a personal cost and is not tax deductible. You may not deduct the cost of commuting to your rental residence to make improvements to the property, either. A cost recovery system like depreciation will typically cover that.

Actual Expenses

Many of the costs pertaining to having to travel from home in connection with the rental residences will be reported in this approach. IRS Publication 463, Chapter 5 stipulates precisely how these costs need to be reported and backed up with invoices and receipts. Some software applications can be obtained with iPod, Quick Books, Mint, and others, but you will need to continue to keep a real report to backup your deductions. You have to report this either in your Schedule C or Schedule E together with important forms connected to those. If you’ve got a number of properties, your business expenses must be allotted to the residences in which the expenses were accrued. Only use specifically connected with your rental properties is permissible to write off, so do not include any sort of personal or other kinds of non-property related expenses on these documents.

Mileage Method

Another approach, under which you may write off the actual mileage traveled. As an example, if you drove 1200 miles throughout the year 2012, you could use the present standard mileage rate of $0.55.5 per mile based on existing taxation rates to deduct the total cost incurred.

You’ll need records to back up all use of local transport including auto rentals, metro bus service, and Zip Cars. Of course, all must have been used for transportation directly linked to the property. If using with public transport, it is advisable that you maintain travel stubs. It is a good idea to maintain a separate company account for rental cars and Zip Cars to demonstrate how the use is solely business associated.

  • You can obtain the different documents mentioned in this information on the IRS’s webpage. To learn more please check with IRS Publication 527.

Bellevue CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

Necessary Tax Documents for Reporting Rental Property Income

As a law abiding property owner, to completely record and report your annual rental property income to the Internal Revenue Service, you will need different Internal Revenue Service tax documents which will be discussed within this brief article. As laid out in this article, the tax documents considered necessary change depending on the particular official business who is the owner of the rental property (individual, partnership, corporation, or LLC). For further information on legal entity rental property ownership, look at the article in this Guide, titled Best Rental Property Ownership.

TIP: Quick note – You can locate the forms described in the following paragraphs on the Internal Revenue Service’s homepage: Each of the necessary documents should be included in any tax preparing computer software, if you use one of them.

Individual Ownership

Which includes joint ownership with a wife or husband, tenancy in common, or shared tenancy with legal rights of survivorship.

Form 1040. All individual people have to file Form 1040, so this is the place you need to get started. Your own net rental property revenue or financial loss subject to taxation will appear on line 17 from the first page in Form 1040. You aren’t able to take advantage of the easy Forms 1040A or 1040-EZ, as a property manager with rental activity.

Schedule E. The addendum to Form 1040 you have to know about is Schedule E. It actually has various uses, however the usage that is meant for you is reporting of leasing profit and expenses. The only element of Schedule E that you have to complete is the segment titled “Part I”. Different essential tips to be aware of: when reporting on a rental you jointly own with a person, who is not your significant other, you just need to report the costs which you sustained and also the profits which you earned. Don’t forget, furthermore, that you will have to keep track of your expenses regarding rental and non-rental use if you’re renting a segment of your own personal residence, or whenever you only leased for part of the entire year. Look at the series of articles called Tax Deductible Rental Property Expenses, contained in this Guide, for more tips.

Form 4562. At line 18 of Schedule E, you are able to deduct the depreciation on the property, which you will use Form 4562 to figure out. For more details, look at the article called, Depreciation Expenses for Rental Property, which is in this Guide.

Partnership/Corporate Ownership

Such as a general or limited partnership, or S corporation.

Form 1065/1120-S. The tax form a collaboration utilizes to report all of its enterprise operations is Form 1065, which you will need to fill out if you have a joint venture. An S corporation uses Form 1120-S to report its business activities. Your total leasing revenue or deficit should be reported on Schedule K, line 2 of Form 1065 or 1120-S (Schedule K is embedded in those forms).

Form 8825. This tax form functions like Schedule E, except that it’s for partnerships and S corporations. Schedule E and Form 8852 are basically similar. Make sure you include whole sums of all profits and operating costs accrued by the partnership or corporation (In the future, they are allocated to each shareholder or business partner).

Schedule K-1. This tax form reports the total leasing income or loss due to each partner or shareholder in line with that business partner or investor’s rental property ownership interest. Each partner receives their own personal K-1 and must report the details of their K-1 on their own Form 1040, Schedule E, Part II.

Limited Liability Company (LLC) Ownership

A single owner LLC is actually a disregarded entity for taxation requirements, which means you can file just like you’re an individual rental property owner (see above). A multiple-member LLC has the option to be taxed as a partnership or as an S corporation (see above).

Seattle Accountant has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

Deductions for Landlords: The Home Office

There are few tax deductions taken by business owners that are more feared than home office deductions. Some business owners are convinced that claiming this deduction increases the chance of an audit, although the IRS is adamant that this isn’t the truth. Either way, if you follow the rules, and maintain proper records, you should have no fears.

The key to this tax deduction is that rental property owners may claim this tax write-off if they are active, which is to say you must be doing more than cashing checks. If you consistently spend a substantial amount of time preparing and maintaining properties, you will likely qualify as an ACTIVE rental property owner.

Once you’ve met this qualifier you will also need to meet the basic home office deduction thresholds. Firstly, you must use the home office exclusively for your rental business on a regular basis.

Then you’ll also have to meet at least one of the following:

1. This office space must be the principle location from where you manage your business as a rental property manager.

2. You have no other fixed location where you perform the administrative activities that are required to operate your business.

3. You use the office to meet clients and potential clients.

4. You use some other structure on your property to conduct business.

After you’ve determined that you are eligible for home office deduction, then it’s time to learn what expenses qualify for deductions. There are two major types: direct and indirect. Indirect expenses benefit the entire home. While direct expenses benefit the home office space only. Examples of direct expenses can be painting or cleaning expenses. While examples of indirect expenses can be payments on property tax, mortgage,, and utilities, these expenses are apportioned out between the office and the rest of your home. This percentage is usually calculated by the square-footage ratio. For example, a 2,000 square foot home with a 200 square foot office space would mean that 10% of indirect expenses would count toward home office deduction expenses.

And you will want to ensure that you are keeping meticulous records in case there is an irs audit. You will need to be able to prove that you were entitled to any claimed tax deductions. A diagram and/or a photo will support your claim of square-footage ratios. It is wise to have your home office address listed on business cards, letter heads, or other forms of professional communication. And when using your home office to meet tenants, it is wise to keep a log to keep track of meetings. You should keep utility bills, mortgage interest statements, insurance premium statements, property tax statements, and other related expense statements.

Home office deductions can get complicated. Please do not consider this to be reasonable solution to the informed counsel of a seasoned Bellevue CPA. But this should help you gain a basic understanding the requirements of successfully claiming home office deductions.

Bellevue Accountant +John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

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Part 1: Tax Deducible Rental Property Expenses

This article from the Rental Property Tax Guide concentrates on the various types of expenses that you may deduct from your gross rental income so as to calculate your net rental income. Since there is a variety deductible expenses, this Rental Property Tax Guide breaks down the topic into four different varieties. This first chapter will focus on professional fee expenses, advertising, and interest incurred.


If you’re renting a room in your home, or if it is a duplex and you’re occupying the other unit, you will need to pro rate the mortgage expense. (See the article titled Personal Use of Rental Property, included in this guide, for more on how to calculate personal use). Now if you are renting the property as its own living unit, you can deduct all of the mortgage interest you paid on Schedule E. Also, if you own only a part interest in the rental, you must multiply the total amount of mortgage interest paid on the property by your ownership interest. Be aware, however, that certain expenses you pay to obtain a mortgage (such as title/recording fees and commissions) are capitalized as part of your depreciable basis for the property, and are not expensed. See the article titled Depreciation Expenses for Rental Property, included in this Guide, for more on depreciation expense. Other types of interest may also be deductible, if you incurred the interest solely for the benefit of the rental property.


Any fees you incur to list your property on the open market and promote the property are deductible. For example, ads that you pay for from a local newspaper, or any Internet advertising you pay for, are deductible.

Professional fees

If you pay legal counsel to pen a rental agreement or start court actions to be able to evict a renter, it’s possible to deduct these expenses. Also you can deduct the fees of an accountant or Bellevue CPA for preparing the Schedule E of your return from the year before. Make sure you pro rate the complete fee between the rest of your return versus the Schedule E portion of you return based on time spent. Any fees unrelated to the Schedule E appear on Schedule A as personal tax preparation expenses. Also any commissions or management fees to professional realtor groups for overseeing your property are deductible as well.

Bellevue Accountant has written numerous articles on accounting and other tax related matters of concern to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

Deduction of Startup Expenses

Particular expenses incurred in preparing a property for rental (prior to actually renting,) are deductible. So let’s have a look at several of them.

Note: Startup expenses discussed here, are dissimilar from the expenses which qualify as deductible (under section 195 of the Internal Revenue Code.) Under section 195, a number of startup expenses (in an active trade or business) are deductible up to $5,000 with the balance amortizable over fifteen years. However, in this section of the Internal Revenue Code, rental activity is not included because rental activity is thought to be a passive activity not an active trade or business. See the article titled Tax Deductible Rental Losses, included in this Guide, for a more focused study of passive activity rules.

NOTE: “Rental activity” begins the moment you make the property available for rent and place it on the market, not when you have actually have a tenant or a renter.

Expenses Related to Obtaining a Mortgage

Expenses such as mortgage commissions, abstract fees, and recording fees, are capitalized and become part of your basis in the property. And this means you will need to depreciate these particular expenses, rather than expensing them all at once. See the Depreciation Expenses for Rental Property article, included in this Guide, for more on depreciation.


“Points” are charges paid by a borrower to take out a loan or a mortgage. This points or charges may also be called origination fees, or premium charges, or maximum loan charges. Points are deductible as interest, but require that you amortize the points over the life of the loan. Determining the amount of points to amortize per year, is task beyond the scope of this article. Seek the counsel of a Bellevue tax professional.

Repairs vs. Improvements

You must capitalize and depreciate all improvements you make to the property before putting the rental property on the market. Improvements prolong the use of the property or materially add to the property’s market value. On the other hand, you may freely deduct all repair expenses. A repair aims to keep your property in good working condition, not to increase the market value or prolong use. See the series of articles about deductions and depreciation, included in this Guide, for more information.

Bellevue Accountant has written prolifically on accounting and other tax related subjects. He is a graduate of the University of Washington School of Law.

Ownership of Rental Properties

Let’s begin by looking at the various entity selection types that are available. Each has positives and negatives. As a rule of thumb, you’ll look to protect your property from unsecured creditors and limit your liability. So let’s unroll the list and see what we’ve got.

TIP: To establish any of the entities presented below, registration forms must be submitted with the Washington Secretary of State’s office. Find the forms at: Washington Entity Forms.

TIP: Always consult with an attorney or Bellevue CPA before establishing an entity and transferring ownership of a rental property to it. This Guide is not meant to be a comprehensive solution you should seek the care of a qualified professional.

Individual Ownership

This form of ownership is the more common and simplest method of ownership and occurs when you purchase the rental property in your name. This includes owning the property with your spouse, or as joint tenants or tenants in common with someone else. The big benefit is that this is straightforward, and doesn’t require the filing of any complicated paperwork or filing fees. The key disadvantage to this form of ownership is that your creditors might be able to force a sale of the rental property if they can attain a court judgment against you, or force you into involuntary bankruptcy.

Legal Entity Ownership

Corporations, general partnerships, and limited liability companies are all examples of legal companies. The differences between these entities are important and outlined below. The major advantage to entity ownership is that your personal creditors are not able to force a sale of the rental property, considering the fact that you don’t own it. The only type of entity that does not require registration with the Secretary of State is the general partnership. With regards to taxes, the entity type chosen doesn’t matter a tremendous amount because in most cases, income from the rental property “passes through” from the entity and is taxed on your personal tax return (but see the cautionary note under corporations). Cover the article titled Necessary Tax Forms for Reporting Rental Activity, which is included in this Guide, for further discussion on just how rental income is taxed.

General partnership. This form of ownership takes place when two or more persons co-own a for profit business. Now with this general partnership each partner has equal management privileges, however each partner is personally liable for the debts of this partnership. And thereby a general partnership is most often not preferred.

Limited partnership. This entity is more complex than a general partnership as it requires both one limited partner and one general partner. The general partner has sole management rights, coupled with personal liability for any debts. Whereas, the limited partner is not personally liable for debts of the partnership and furthermore is without management rights. This entity selection is generally not recommended.

Limited liability partnerships (LLPs) or limited liability company (LLCs). A limited liability partnership and a limited liability company are similar forms of entity selection. Both provide limited liability to the members and partners. This would mean that you are not personally liable for the entity’s debts, that is, unless the debts are the result of your own wrongdoing. This form of ownership is preferred as it reduces liability and allows fewer formalities than those of the corporation.

Corporations. Corporations allow for perpetual existence and limited liability. But on the negative side, they require the observance of particular formalities so as to preserve the limited liability protection. Without these formalities, a court could very well “pierce the corporate veil” and hold you personally liable. It is for this reason that LLPs and LLCs are ordinarily more desirable for a rental property owner. Additionally, for the purpose of taxation, corporations are split into s-corporations and c-corporations. When a corporation is taxed as a “C” corporation, it will pay tax on rental income, and then you will pay tax again when the corp pays you dividends. And you should steer clear of this “double taxation” snare.

Bellevue Tax Accountant has written prolifically within the subjects of accounting and taxes. He is a graduate  of the University of Washington’s School of Law, with a Juris Doctorate and a Masters in Tax Law.

Purchasing a Dental Practice: What to Know

It is a very important that you give yourself due consideration in deciding where to buy, how to go about it, and what kind of practice to purchase.

Do Your research

Pace yourself. You are building the foundation of your future. Where do you want to live, how responsive will the community be to your new practice, how much of a rapport do you already have with the community?

Find the Best Location

Where would you like to live? You’ll want to be a big part of this community, so you’ll need to make sure it’s a good fit. Dentists who involve themselves in community events and organizations are usually successful as they are meeting people and networking all the while. And ensuring a shorter commute could also pay off. Trading off time spent in commute with time spend amongst family and friends is not a bad deal.

Establish yourself amongst people you can relate to and people you can enjoy. Your practice and your interpersonal life will reap the benefit. Intercity or rural–what’s best for your family? Let the location of your competition inform your decision. Other issues are whether or not your spouse needs to find work, and the quality of the school system in the area.

Choose the Ideal Practice for You

Lay out a working business plan. What size of dental practice do you anticipate? And do be careful to leave room for growth. Will you be establishing a specialized or generalized dental practice. Can you establish relationships with other practices in the community that can give you referrals? Does working a full five-day schedule with a large list of clients appeal to you? Or do you want a smaller practice, with a slower pace, that will allow you to work fewer hours? Naturally, these decisions will affect your finances and may dictate your level of day-to-day stress too.

Get the Proposed Business Appraised

Have the business appraised with the help of a certified public accountant or valuation specialist. And opt for a professional that has experience with dentistry practices. This way you can establish a frame of reference for what local dentists practices, similar to your own are worth.

Round-up the Troops

Trying to save money by being completely self-sufficient is a poor decision when you plan on purchasing a dental practice. In the long-run, investing in advisors will save you a lot of trouble. Here are a few people you’ll need:

  • A CPA or accountant with a successful track record of advising dentistry practices and other small businesses on maximizing deductions and remaining tax compliant. You want an accountant who can help you set up tax strategies. You will need a certified public accountant to advise you on how to structure your dental practice (S corporation, C corporation, limited liability company (LLC), professional limited liability company (PLLC), sole proprietor).
  • A Bookkeeper who has familiarity in a bookkeeping software system such as Quickbooks. A certified Quickbooks Advisor is a level of distinction in which a bookkeeper certified by the makers of Quickbooks as skilled with the accounting platform.
  • A legal professional to review documents and legally protect your interests.
  • A consultant also will most probably prove invaluable in the long run, helping you avoid pitfalls.
  • From the beginning, you should establish a relationship with a bank. Getting prequalified will help you gain a handle on how to put in a good offer and how much you can afford.
  • An insurance rep will assess the value of your business and evaluate risk to see just how much coverage you will need.
  • It is wise to seek advice from a mentor or business confidant of some kind, perhaps a veteran dentist who once went through the same process you’re going through now.
  • A marketing expert-preferably someone with knowledge of internet marketing.

When starting a dentistry practice, go into it with a team that can make sure you get it right.

Supporting Documents & Form 656

Preparing Form 656 and Supporting Documentation in Attempting an Offer for Compromise of IRS Back Tax Debt

An Offer for Compromise (OIC) is a tax settlement offer from the Internal revenue service to taxpayers, both individuals and businesses, who are unable to manage their tax debt. There are certain strict criteria that determine eligibility to request the OIC. And if you satisfy these requirements, you will need to fill out Form 656 and submit a whole host of supporting documents to be considered for an offer.

Preparing Form 656 (OIC)

There are two circumstances in which you’ll meet the requirements to file Form 656. In the first, you’re making a case that paying the full amount of owed taxes will create economic hardship. In the second, you are make the case that there is doubt as to collectiblity.

Now that you know the circumstances in which you will need to prepare Form 656, here’s what you should remember when completing the form

• You will have to provide the names of both the parties if you are pursuing a joint offer for joint liabilities. When you owe a joint liability and both your partner and you are submitting for an OIC, then you’ll want to do so on Form 656, just one form. You might owe a liability, such as employment taxes for yourself and hold other liabilities, such as income taxes, with another person. If you are submitting this offer solely this form, then you will need to list all liabilities on one of Form 656. In case both of you want to submit this application, then you have to include all tax liabilities on your Form 656 and the other person must show only the joint tax liability on their Form 656.

  • You’ll have to include the relevant information in every field on the Form 656.
  • All persons submitting the offer should enter their social security numbers.
  • You need to give the employer identification numbers of all businesses, except corporate concerns, that you own, either wholly or partly.
  • If your claim to an Offer for Compromise is based on a Doubt as to Collectability, you need to also furnish a completed Form 433A if you are an individual taxpayer and Form 433B if you are a business taxpayer.
  • If your claim to an Offer of compromise is based on Effective Tax Administration, then apart from submitting a Form 433B or 433A, you also fill out the info in the “Explanation of Circumstances.” You can include supplementary relevant information in separate sheets along with your social security and employer identification numbers.
  • When supplying the total amount of your offer, you don’t include a sum that the IRS owes you or any amount that you may have already paid in taxes.
  • All persons submitting the offer should sign the 656 Form and give the date. They must supply as well the titles and names of authorized corporate officers, trustees, Powers of Attorney, and executors where requested.
  • Be sure that you disclose the name and where possible, the address of the OIC preparer.
  • You might want the IRS to contact a a friend, a family member, or any other acquaintance to discuss your case so that they may understand your state of affairs better. In that case, you’ll need to mark the “Yes” box in the “Third Party Designee” field. Additionally, if you would like a CPA, your attorney, or an enrolled agent to represent your case, you need to furnish the 2848 Form and submit it in addition to your offer. to improve the chances of your offer being accepted. Once you have gathered all the documents for submission, ensure that you make electronic copies or hard copies of each one for your personal records. Apart from these documents, you might also submit additional documents that you think will corroborate your claim for the offer.


Filing for the Offer of Compromise is complicated. Make sure to spend ample time on Form 656 and submit all supporting documents to increase your chances of success.

For more on Offer in Compromise solutions, visit:
Seattle Offer in Compromise
Accountants and Tax Preparers in Bellevue

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  • Huddleston Tax CPAs / Huddleston Tax CPAs – Bellevue CPAs
    Certified Public Accountants Focused on Small Business
    40 Lake Bellevue Suite 100 / Bellevue, WA 98005
    (425) 273-6512

    Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching,
    QuickBooks consulting, bookkeeping, payroll, offer in compromise debt relief, and business valuation services for small business.

    We serve: Tukwila, SeaTac, Renton. We have a few meeting locations. Call to meet John C. Huddleston, J.D., LL.M., CPA, Lance Hulbert, CPA, Grace Lee-Choi, CPA, Jennifer Zhou, CPA, or Jessica Chisholm, CPA. Member WSCPA.