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, 2022. 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 a program that allows taxpayers to settle their tax debt for less than the full amount owed.

Q: Who is eligible to submit an Offer in Compromise?A: Generally, individuals, businesses, and self-employed taxpayers who can't pay their full tax liability may be eligible.

Q: What information is required on IRS Form 656?A: Form 656 requires information about your financial situation, including income, expenses, assets, and liabilities.

Q: Is there a fee for submitting IRS Form 656?A: Yes, there is a non-refundable fee of $205 for submitting Form 656, unless you qualify for a low-income certification.

Q: How long does it take for the IRS to review an Offer in Compromise?A: The review process can take several months to a year or longer, depending on the complexity of your case.

Q: What happens if the IRS accepts my Offer in Compromise?A: If your offer is accepted, you can settle your tax debt for the agreed-upon amount and avoid further collection efforts.

Q: What happens if the IRS rejects my Offer in Compromise?A: If your offer is rejected, you have the right to appeal the decision or explore other options to resolve your tax debt.

Q: Can I hire a tax professional to help me with IRS Form 656?A: Yes, it's recommended to seek the assistance of a tax professional who specializes in tax debt resolution.

Q: Are there alternatives to an Offer in Compromise?A: Yes, other alternatives include installment agreements, currently not collectible status, and bankruptcy, depending on your financial circumstances.