Get the free IRS Form 656 Offer in Compromise

Get Form

We are not affiliated with any brand or entity on this form

Fill out

Complete the form online in a simple drag-and-drop editor.

eSign

Add your legally binding signature or send the form for signing.

Share

Share the form via a link, letting anyone fill it out from any device.

Export

Download, print, email, or move the form to your cloud storage.

Why pdfFiller is the best tool for your documents and forms

Learn more about security

End-to-end document management

From editing and signing to collaboration and tracking, pdfFiller has everything you need to get your documents done quickly and efficiently.

Accessible from anywhere

pdfFiller is fully cloud-based. This means you can edit, sign, and share documents from anywhere using your computer, smartphone, or tablet.

Secure and compliant

pdfFiller lets you securely manage documents following global laws like ESIGN, CCPA, and GDPR. It's also HIPAA and SOC 2 compliant.

What is IRS Form 656

The IRS Form 656 Offer in Compromise is a tax document used by taxpayers to propose a settlement for their tax debt to the IRS.

pdfFiller scores top ratings on review platforms

Show more Show less

Fill fillable IRS 656 form: Try Risk Free

Rate free IRS 656 form

4.6

satisfied

52 votes

Who needs IRS Form 656?

Explore how professionals across industries use pdfFiller.

IRS Form 656 is needed by:

Individuals facing tax debt who cannot pay in full
Taxpayers seeking tax relief or compromise
People needing to submit financial information for tax evaluation
Individuals wanting to address economic hardship due to tax liabilities
Accountants or tax professionals advising clients on settlements

Comprehensive Guide to IRS Form 656

What is the IRS Form 656 Offer in Compromise?

The IRS Form 656 is a crucial document for taxpayers seeking to propose an Offer in Compromise (OIC) to the Internal Revenue Service (IRS). This form serves as a tool for individuals who are unable to fully pay their tax debts, allowing them to settle for a reduced amount. By utilizing IRS Form 656, taxpayers can approach their tax liabilities proactively, enabling relief from overwhelming financial obligations.

When filing this form, taxpayers must provide detailed financial information to illustrate their inability to meet the full tax debt. The form helps streamline the tax settlement process and facilitates clearer communication between taxpayers and the IRS.

Purpose and Benefits of Submitting IRS Form 656

Taxpayers choose to file the IRS Form 656 when they find themselves in situations where paying their tax debt in full would impose undue hardship. Using this form can result in several significant benefits:

Reduction in total tax liability, allowing for a manageable payment plan.
Enhanced financial relief for taxpayers facing economic challenges.
The potential for equitable settlements for those in extraordinary circumstances.

By pursuing an Offer in Compromise, individuals can navigate their financial challenges while ensuring they do not remain burdened by unmanageable tax debts.

Who Needs the IRS Form 656 Offer in Compromise?

The IRS Form 656 is designed for specific taxpayers in need of financial relief. Ideal candidates include:

Individuals struggling with tax debt who are unable to afford full payment.
Taxpayers facing unique situations which make repayment unfair or unreasonable.

This form opens avenues for relief to those who qualify, providing them with a chance to reset their financial standing.

Eligibility Criteria for IRS Form 656 Offer in Compromise

To successfully file the IRS Form 656, taxpayers must meet specific eligibility criteria, including:

Providing comprehensive financial details, such as income, expenses, and assets.
Demonstrating special circumstances that may warrant an OIC.

Understanding these criteria ensures that taxpayers can determine their suitability for submitting an Offer in Compromise, leading to a potential resolution of their tax obligations.

How to Fill Out the IRS Form 656 Offer in Compromise

Completing the IRS Form 656 requires careful attention to detail. Here’s a step-by-step guide to ensure successful submission:

Gather the necessary financial information, including income and expenses.
Prepare a clear narrative explaining your special circumstances.
Complete the form accurately, ensuring all sections are filled out as required.

Following these steps can significantly improve the chances of your offer being accepted.

Common Errors and How to Avoid Them

When filing the IRS Form 656, taxpayers must be aware of common mistakes that could jeopardize their submission. Some frequent errors include:

Inaccuracies in financial reporting that do not reflect actual circumstances.
Failing to include all necessary documentation with the form.

To avoid these pitfalls, taxpayers should thoroughly review their forms and double-check all provided information before submission.

Submission Process for IRS Form 656 Offer in Compromise

Once the IRS Form 656 is completed, the next step is submission. Taxpayers can utilize various methods, such as:

Mailing the completed form to the designated IRS address.
Submitting online through the official IRS portal, if applicable.

It's essential to be aware of important deadlines and what to expect during the review process following submission.

What Happens After You Submit the IRS Form 656?

Following the submission of the IRS Form 656, taxpayers can expect a few key actions:

Processing times may vary, but updates will be communicated by the IRS.
Taxpayers can check the status of their offer, ensuring they stay informed throughout the process.

Understanding what comes next can help ease concerns during this critical period.

Security and Compliance with IRS Form 656

When handling sensitive financial documents, security and compliance are paramount. pdfFiller employs robust measures to protect user information:

256-bit encryption ensures data security during transmission and storage.
Compliance with SOC 2 Type II, HIPAA, and GDPR regulations safeguards user privacy.

These protocols highlight the platform’s commitment to secure document handling and data protection.

Get Started with Filling Out IRS Form 656 Today!

Utilizing pdfFiller can simplify the process of filling out IRS Form 656. The platform offers a range of features that assist taxpayers in managing their documents:

Editing and annotating directly within the PDF format.
Cloud-based access provides flexibility in filling out forms anytime, anywhere.

By leveraging the tools available on pdfFiller, users can navigate tax form submissions with confidence and ease.

Last updated on Mar 29, 2016

How to fill out the IRS Form 656

1.

Access pdfFiller and log in to your account. Use the search bar to find 'IRS Form 656 Offer in Compromise'. Click on the appropriate link to open the form.
2.

Navigate through the pdfFiller interface to find the specific fields to complete. You will see options to add information to various sections of the form.
3.

Before starting to fill out the form, gather necessary documents such as your income details, expenses, assets, and any written narrative explaining your special circumstances.
4.

As you fill in the form, ensure you provide all required financial information accurately. Take your time to fill in the narrative section to clearly explain why paying the full amount would cause economic hardship.
5.

After completing all fields, review the form for any errors or missing information. Utilize pdfFiller's features to check for completeness and correctness.
6.

Once satisfied with your form, you can save it directly to your pdfFiller account. You also have the option to download a copy for your records in PDF format.
7.

To submit the completed form to the IRS, follow submission instructions specific to Form 656, which might include mailing the physical copy or electronic submission, if available.

FAQs

If you can't find what you're looking for, please contact us anytime!

Contact Support

Who is eligible to submit IRS Form 656?

Eligibility to submit IRS Form 656 includes being a taxpayer unable to pay the full tax amount owed. Certain income thresholds and financial situations may affect eligibility. It's crucial to assess your financial conditions before applying.

What documents do I need to submit with Form 656?

You need to provide detailed financial information, including income, expenses, assets, and a written narrative explaining your economic hardship. Supporting documentation supports your claims, including pay stubs and bank statements.

How is Form 656 submitted to the IRS?

IRS Form 656 can be submitted by mailing a physical copy to the IRS. Ensure you follow the specific mailing instructions provided by the IRS for your settlement offer.

What are common mistakes to avoid with Form 656?

Common mistakes include not providing complete financial information, failing to include all required documentation, and leaving out the narrative explaining your special circumstances. Careful review can help mitigate these errors.

How long does it take for the IRS to process Form 656?

Processing times for Form 656 may vary but generally can take several months. Keep in mind that during peak tax seasons, processing times might be longer. Regularly check the IRS website for the most updated information.

Are there fees associated with submitting IRS Form 656?

Yes, there may be a fee associated with submitting Form 656, often a set amount that is due at the time of submission. Check the IRS guidelines for the latest fee structures concerning offers in compromise.

Can Form 656 be e-filed?

Currently, Form 656 cannot be e-filed and must be submitted in paper format by mail to the IRS. Verify whether any updates have occurred regarding electronic submissions.