Form 656-A

Form 656-A

A form one files with the IRS along with a Form 656 declaring that one has paid the appropriate application fee for an offer in compromise, which is a program whereby a person or company owing delinquent taxes asks to settle the debt for less than the full amount owed. If one claims not to owe an application fee (due to low income or other factors) and the IRS determines otherwise, the application for offer in compromise is denied automatically.
References in periodicals archive ?
Form 656-A, renamed Income Certification for Offer in Compromise Application Fee and Payment.
Taxpayers meeting this criteria must submit Form 656-A, Offer in Compromise Application Fee Instructions and Certification.
It includes Form 656-A, Income Certification for OIC Application Fee, and a worksheet to help taxpayers determine whether they meet the income exception to the $150 fee; a checklist to help them determine whether they are eligible; a third-party designee section, which allows a person other than the taxpayer to discuss any additional information the IRS needs to process the offer; and a summary checklist that reduces the chance the IRS will return the application for omissions.
The $150 user fee must be attached to Form 656; if no fee is required, Form 656-A, Income Certification of Offer in Compromise, must be attached.
Taxpayers seeking relief under the new hardship/equity guidelines must submit the new form 656-A in addition to form 656 (the standard OIC form).
Form 656-A, An Explanation of Circumstances, should accompany Form 656 when there is an additional basis for compromise involving effective tax administration.
The IRS issued Form 656-A, Additional Basis for Compromise, using the new criteria, taxpayers should submit this form (along with Form 656, Offer in Compromise (the standard offer-in-compromise application)).
Form 656-A specifies that, before an offer in compromise will be considered, the Service must first determine that the taxpayer owes tax and that the taxpayer has sufficient assets or income (or both) to pay it.
Tax advisers should exercise caution before using Form 656-A, as it admits liability and ability to pay.