Form 656

Form 656

A form one files with the IRS to request 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. In order to file Form 656, the taxpayer must state that he/she will never be able to pay his/her taxes in full or show that there are other circumstances, such as age or disability, that will hinder payment. See also: Form 433.
References in periodicals archive ?
The request for an OIC based on doubt as to collectibility is made on a Form 656, Offer in Compromise, which also requires submitting Forms 433-A and/or 433-B, and supporting statements and documents.
With limited exceptions, addressed below, an OIC requires submission of Form 433-A in addition to Form 656.
You'll find instructions and the forms for submitting an offer in IRS Form 656 Booklet: Offer in Compromise.
You can make an offer in compromise using Form 656, which like an installment agreement will require that you pay a fee ($150) for the privilege.
To determine the "reasonable collection potential" of a taxpayer, the taxpayer must complete and file form 656 (offer in compromise) with supporting documentation to substantiate the taxpayer's assets, liabilities, income, and "necessary" living expenses.
The IRS has released a revised Offer in Compromise Form 656 package, adding significant changes as a result of the 2005 Tax Act, including:
With this week's publication of revised tax Form 656 and an array of internal IRS changes underway, the agency is fundamentally changing the Offer in Compromise program.
* Form 656, Offer in Compromise--individual and business tax debt (corporation/LLC/partnership) must be submitted on separate Forms 656.
Form 656, Offer in Compromise, and Form 656-B, Offer in Compromise Booklet, have been revised to reflect these changes.
An Offer in Compromise (Form 656) is an agreement with the IRS that lets you resolve your tax bill for less than you owe; the general rule is at least 14% of the amount owed must be paid.
The statute of limitation for collection is suspended while an offer is considered pending by the IRS (see Form 656).
An offer to compromise a tax liability must be submitted in writing on Form 656, Offer in Compromise.