What’s the Deal With IRS Form 656?

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You’re ready to ditch your IRS tax debt for good — and you believe that the offer in compromise program is your best option. Before you can take advantage of this option, however, you’ll need to complete IRS Form 656. Thoroughness and accuracy are critical, as a single mistake could lead to rejection. Keep the following considerations in mind as you move forward with this critical IRS document:

Versions of Form 656

Before you begin working on Form 656, it is crucial that you understand how, exactly, various versions of this document differ — and which edition applies to your situation. Variations on Form 656 include:

  • Form 656-B. This standard form is used for situations involving the doubt of collectability. Essentially, this means that the presence of debt is not in question, but rather, whether you are actually capable of paying off such liabilities.
  • Form 656-L. For cases involving doubt as to liability, this form allows for explanations of why currently assessed tax debt is in dispute.
  • Removable forms. Depending on the situation, individuals or businesses may be required to complete additional documents attached to Form 656. These include Form 433-A (Collection Information Statement for Wage Earners and Self-Employed) and Form 433-B (Collection Information Statement for Businesses).

Form 656 Does Not Offer Any Guarantees

As you complete Form 656, keep in mind that the document provides no guarantees of OIC acceptance. In reality, this application represents only the beginning of a potentially lengthy process in which the IRS evaluates and verifies your situation, taking personal circumstances into consideration. By completing the form accurately, however, you can dramatically improve your likelihood of securing a favorable OIC.

If you’re interested in pursuing an offer in compromise, don’t hesitate to seek help from the Highland Tax Group. With our assistance, you could resolve your IRS issues quickly and favorably. Contact us today to learn more about our tax resolution services.