Get the free Form 656 Offer in Compromise - CPAide

IRS Department of the Treasury Internal Revenue Service www.irs.gov Form 656 (Rev. 02-2007) Catalog Number 16728 N Form 656 Offer in Compromise IMPORTANT! THIS BOOKLET CONTAINS INFORMATION THAT YOU

How to fill out form 656 offer in

How to fill out Form 656 Offer in:

1. Gather all necessary documents: Before filling out Form 656 Offer in Compromise, make sure you have all the required documentation. This includes your financial statements, tax returns, and any supporting documents requested by the IRS.
2. Complete your personal information: Start by filling out your personal information on the form, including your name, address, social security number, and contact details. Ensure that all the information provided is accurate and up-to-date.
3. Determine your eligibility: Review the eligibility criteria outlined in the instructions for Form 656. Ensure that you meet the qualifications for submitting an offer in compromise, such as being unable to pay your tax debt in full or experiencing exceptional circumstances.
4. Assess your financial situation: Evaluate your financial circumstances thoroughly to determine the amount you can afford to offer the IRS as a settlement for your tax debt. This includes assessing your income, expenses, assets, and liabilities. Be honest and transparent in documenting your financial information.
5. Calculate your offer amount: Use the Offer in Compromise Pre-Qualifier tool provided by the IRS or consult a tax professional to help you determine the appropriate offer amount. This calculation involves considering your future income potential, assets, equity, and allowable expenses.
6. Complete the required forms and schedules: In addition to Form 656, there are other forms and schedules (such as Form 433-A or 433-B) that need to be filled out and submitted as part of the offer in compromise process. Follow the instructions carefully and ensure that all sections are completed accurately.
7. Provide supporting documentation: Attach all the necessary supporting documentation to substantiate your financial situation and offer amount. This may include bank statements, pay stubs, mortgage statements, and any other relevant documents that support your offer and financial claims.
8. Review and double-check: Before submitting your Form 656, review all the information provided and double-check for any errors or omissions. Make sure all calculations are accurate, and all required sections and schedules are completed.

Who needs Form 656 Offer in?

1. Individuals with outstanding tax debt: Form 656 Offer in Compromise is mainly used by individuals who are unable to pay their tax debt in full and are seeking a compromise with the IRS to settle the amount owed.
2. Businesses with tax liabilities: Business entities that are struggling with tax liabilities can also utilize Form 656 to propose a compromise offer to the IRS.
3. Taxpayers facing exceptional circumstances: Individuals or businesses who are experiencing exceptional circumstances, such as a disability, financial hardship, or other extenuating circumstances, may also need to use Form 656 to request an offer in compromise.

Note: It is advisable to consult with a tax professional or seek guidance from the IRS to ensure compliance and accuracy when filling out Form 656 Offer in Compromise.

For pdfFiller’s FAQs

What is form 656 offer in?

Form 656 offer in is an official document used by taxpayers to propose an offer in compromise (OIC) to settle their outstanding tax liabilities with the Internal Revenue Service (IRS).

Who is required to file form 656 offer in?

Any individual or business entity with tax liabilities who wishes to negotiate a settlement with the IRS can file form 656 offer in. However, not all offers are guaranteed to be accepted.

How to fill out form 656 offer in?

To fill out form 656 offer in, you need to provide personal and financial information, including your name, address, Social Security number (SSN) or employer identification number (EIN), tax years involved, proposed settlement amount, and supporting documentation. It is recommended to consult with a tax professional or refer to the instructions provided with the form for detailed guidance.

What is the purpose of form 656 offer in?

The purpose of form 656 offer in is to initiate the process of negotiating a potential compromise with the IRS for the settlement of tax debts. It allows taxpayers who are unable to pay their full tax liabilities the opportunity to propose an alternative payment amount, based on their financial situation.

What information must be reported on form 656 offer in?

Form 656 offer in requires taxpayers to report their personal identifying information, including name, address, SSN or EIN, along with details of their tax liabilities, proposed settlement amount, and financial disclosure of assets, income, expenses, and liabilities. Supporting documentation may also be required.

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