IRS Form 656 Offer in Compromise

What Is IRS Form 656?

This is a tax form that was released by the Internal Revenue Service (IRS) - a subdivision of the U.S. Department of the Treasury on April 1, 2020. As of today, no separate filing guidelines for the form are provided by the IRS.

FAQ

Q: What is IRS Form 656?A: IRS Form 656 is used for submitting an Offer in Compromise to the Internal Revenue Service.

Q: What is an Offer in Compromise?A: An Offer in Compromise is an agreement between a taxpayer and the IRS to settle a tax debt for less than the full amount owed.

Q: Who is eligible to file an Offer in Compromise?A: Taxpayers who are unable to pay their tax debt in full and can demonstrate financial hardship may be eligible to file an Offer in Compromise.

Q: How does IRS Form 656 work?A: When submitting IRS Form 656, taxpayers provide detailed financial information to support their offer amount. The IRS will review the offer and consider accepting a reduced amount to settle the tax debt.

Q: Are there any fees associated with filing IRS Form 656?A: Yes, there is a non-refundable application fee of $205 for filing IRS Form 656. In some cases, this fee may be waived for low-income taxpayers.

Q: What happens after filing IRS Form 656?A: After filing IRS Form 656, the IRS will review the offer and may request additional documentation or negotiate the offer amount. It can take several months to receive a decision on the offer.