Form 656 is used to apply for an Offer in Compromise (OIC) with the IRS, which allows you to settle your tax debt for less than the full amount owed.
Apply easily with our editable Form 656. Fill out online in our PDF editor and download it to your device. However, make sure to read the instructions carefully and see what other documents you need for a successful application.
Form 656 is used to apply for an Offer in Compromise (OIC) with the IRS, which allows you to settle your tax debt for less than the full amount owed.
Apply easily with our editable Form 656. Fill out online in our PDF editor and download it to your device. However, make sure to read the instructions carefully and see what other documents you need for a successful application.
Form 656 is used to apply for an Offer in Compromise, which allows you to settle your tax debt for less than you actually owe. This is typically done when you’re experiencing financial hardship and can’t pay your debts, or when full payment would cause you economic hardship.
Individuals or businesses who meet the criteria listed above should use IRS Form 656 to request a compromise and offer the amount to pay instead of what they owe.
There is no specific due date for Form 656, as you can file it whenever you owe tax debt that you can’t pay in full.
If Form 656 is not submitted, you’ll be expected to pay your tax debt in full without any compromises, as the IRS will not be informed of any hardships you may be experiencing. Note that submitting Form 656 also pauses IRS collection activity while your offer is under review. Without it, collections continue uninterrupted.
On the other hand, if the IRS rejects your Offer in Compromise, you have 30 days from the date of the rejection letter to appeal the decision through the IRS Office of Appeals. During the appeal, you can present additional information or arguments supporting your offer.
You should file Form 656 with the IRS using one of the addresses provided in the Form 656 Booklet. However, you need to submit the whole package for the form to count, including:
You can get a blank Form 656 from pdf.net or the official IRS website. Once you have the document, open it in our PDF editor to complete it.
Yes, you can submit Form 656 electronically, either by email or your Individual Online Account on the official IRS website. Regardless of your submission method, you must still provide all the required documents.
If your Form 656 is missing information, the IRS will likely return it to you without processing, and your tax debt will remain the same. Add the missing details and check whether all the documents and payments are in place. Also, use a Form 656 example to ensure you haven’t accidentally skipped anything before resubmitting.
Yes, you can fill out your Form 656 online with our PDF editor. It allows you to type information directly into the empty slots on the document.
This form is free to view and edit, but you need to have an active subscription plan if you want to download it to your device.
It depends on where your application is in the process. If the IRS returned your package without processing due to errors, you can correct the mistakes and resubmit the full package. However, if your OIC is already under review, you would need to formally withdraw your offer and submit a new one.
The IRS can take up to 24 months to process Form 656 and related documents before making a decision on your case. That’s because the process involves verification of your claims and background checks, which can take a while.
You can apply for penalty relief by calling the IRS and explaining your situation. This is the quickest way, as the IRS can immediately tell you whether you’re eligible or not. However, this may not always be possible, so you may be required to submit Form 843 instead. Form 656 isn’t generally used for this; it allows you to lower your tax debt, not erase penalties.
You are eligible for the Fresh Start Program if you owe less than $50,000, can demonstrate financial hardship, regularly comply with filing requirements and make timely payments, and can demonstrate a 25% decline in self-employed income.
The IRS offers a free OIC Pre-Qualifier tool on its official website that walks you through a series of questions about your financial situation and gives you a preliminary indication of whether you're likely to qualify.