What is Form 656?
Form 656, known as the Offer in Compromise (OIC) booklet, is an important IRS form that allows taxpayers to negotiate their tax debt for less than what they owe. By filling out this form, you specify the tax years and types of taxes you wish to settle, along with the offer amount and payment terms. This form serves as a valuable option for individuals who are unable to pay their full tax liability, helping to establish a manageable resolution with the IRS.
What is Form 656 used for?
Form 656 is essential for taxpayers looking to settle their tax debts. Here’s what it’s used for:
- Settle Tax Debt: Negotiate to pay less than what you owe.
- Determine Eligibility: Assess if you qualify for this settlement option.
- Provide Financial Information: Submit your financial details to back your offer.
- Resolve Tax Liabilities: Aim to settle your tax issues beneficially for both you and the IRS.
How to fill out Form 656?
- 1
Fill out Form 656 with the tax years, type of tax, offer amount, and payment terms.
- 2
Ensure your offer amount meets or exceeds the amount from Form 433-A(OIC) or 433-B(OIC).
- 3
Include the $205 application fee and initial payment.
- 4
Make your initial payment via personal check, cashier’s check, or money order, payable to "United States Treasury."
- 5
If applicable, provide complete financial statements using Form 433-A(OIC) or Form 433-B(OIC).
Who is required to fill out Form 656?
Form 656 is typically filled out by individuals or businesses facing tax debts they cannot fully pay. This includes those with joint tax debts wanting to exclude a spouse or ex-spouse, or those experiencing special circumstances hindering full payment.
After completion, the applicant submits Form 656 to the IRS for review. If accepted, the applicant will agree to specific payment terms, including documentation of their financial situation.
When is Form 656 not required?
You don't need Form 656 if you qualify under the Low-Income Certification guidelines, meaning you won’t have to make any offer payments. Also, if your reported expenses disqualify you from an offer in compromise, you won't have to file this form.
When is Form 656 due?
The deadline for Form 656 is when you submit your application for an Offer in Compromise (OIC) to the IRS. Be sure to include the $205 application fee and your initial payment. This payment can be a personal check, cashier's check, money order, or made electronically. For a lump sum offer, the initial payment is typically 20% of the offer amount. For a periodic payment plan, it is the first month's payment.
How to get a blank Form 656?
To get a blank Form 656, visit our website where the Internal Revenue Service (IRS) form is pre-loaded in our editor. You can fill it out conveniently and download it for later use. Remember, our platform helps with filling and downloading, but does not support filing forms.
How to sign Form 656?
To sign Form 656, you need to provide a handwritten signature along with your name, phone number, and today's date. It’s important to remember that electronic or digital signatures are not accepted. Once you've completed the form using PDF Guru, download it and ensure that you sign it properly before submitting it elsewhere. Always check for the latest updates regarding the form to stay compliant.
Where to file Form 656?
To submit your Offer in Compromise using Form 656, you have two main options. You can email your application package to one of the designated sites mentioned on Form 656-B.
Alternatively, you can mail your completed form to the address provided on the form. Local IRS offices also accept submissions, but remember, online submission is not available.
