What is Form 656?
Form 656, Offer in Compromise, is a crucial IRS form designed to assist taxpayers in settling their tax debts for less than the total amount owed. By submitting this form, you can propose a payment plan that the IRS may accept, providing a pathway to resolve your tax obligations without having to pay the full balance. To complete this form, you’ll need to provide detailed financial information along with an initial payment, ensuring that your proposed settlement is fair based on your financial situation. This approach fosters a beneficial resolution for both you and the IRS.
What is Form 656 used for?
Form 656 is important for taxpayers seeking relief from tax debt. Here's what it's used for:
- Settling Tax Debt: Allows settling tax liabilities for less than what you owe.
- Eligibility Check: Helps determine if you qualify for an offer in compromise.
- Payment Terms: Identifies the tax years and types of tax to be settled, along with the offer amount and payment terms.
- Initial Payment: Includes an initial payment based on your chosen payment option.
How to fill out Form 656?
- 1
Fill out your basic information and tax debt details on Form 656.
- 2
Select the reason for your offer in compromise (doubt as to collectibility or effective tax administration).
- 3
Attach financial statements using Form 433-A(OIC) or Form 433-B(OIC).
- 4
Include the $205 application fee and initial payment unless you qualify for Low-Income Certification.
Who is required to fill out Form 656?
Individuals and their spouses or ex-spouses with a joint tax debt must complete Form 656. This form is essential for proposing a settlement amount lower than the total owed to the IRS.
Taxpayers experiencing financial hardship or who cannot pay their full tax liability are required to use Form 656 to submit their Offer in Compromise request to the IRS.
When is Form 656 not required?
Form 656 isn’t required when there is doubt as to liability for tax debt. Additionally, if you are involved in criminal proceedings related to your tax obligations, you may not qualify for this offer. The IRS reviews these situations individually, so eligibility can vary based on specific circumstances.
When is Form 656 due?
Form 656, Offer in Compromise, does not have a fixed annual due date. Instead, you must submit Form 656 when you are ready to apply for an offer in compromise. The form, along with all required supporting documents, the $205 application fee, and the initial payment (unless you qualify for Low-Income Certification), should be sent to the IRS at the time you wish to request a compromise of your tax debt.
How to get a blank Form 656?
To get a blank Form 656, simply visit our platform. The IRS issues this form, and we have a blank version ready for you to fill out in our editor. Remember, PDF Guru helps you fill and download forms, but we do not support filing them.
How to sign Form 656?
To sign Form 656, you need a handwritten signature, as electronic or digital signatures are not accepted. Ensure that the taxpayer, spouse (if applicable), and any paid preparer sign the form in writing. After completing the form using PDF Guru, download it and then print it out to add your signatures. Remember to check for the latest updates on signature requirements before submission, as regulations may change.
Where to file Form 656?
To submit Form 656, you can mail your application package to the address provided on Form 656-B. Ensure all required documents are included.
Alternatively, you can file Form 656 online using the IRS Individual Online Account system if you are an individual taxpayer.
