IRS 656 Offer in Compromise Form

In the case of wanting to allow a qualified professional to negotiate settling an unpaid amount of tax money with the IRS, the following form has to be completed and submitted.

Extracted Text for Proper Search

Form 	656	 (Rev. 5-2012) 	
Form 	656 	
(Rev. May 2012) 
Catalog Number 16728N 	
Offer in Compromise 	
Department of the Treasury — Internal Revenue Service 	
Attach Application Fee and Payment 	(check or money order) 	here. 	
Section 1 Your Contact Information 
Your First Name, Middle Initial, Last Name 
If a Joint Offer, Spouse's First Name, Middle Initial, Last Name 
Your Physical Home Address 	(Street, City, State, ZIP Code) 	
Mailing Address 	(if different from above or Post Office Box number) 	
Business Name 
Your Business Address 	(Street, City, State, ZIP Code) 	
IRS Received Date 	
Social Security Number (SSN) (Primary) 	(Secondary) 	Employer Identification Number (EIN) 	(EIN not included in offer) 	
Section 2 	Tax Periods 	
To: Commissioner of Internal Revenue Service 
In the following agreement, the pronoun "we" may be assumed in place of \
"I" when there are joint liabilities and both parties 
are signing this agreement. 
I submit this offer to compromise the tax liabilities plus any interest,\
 penalties, additions to tax, and additional amounts required by law for\
 the tax type 
and period(s) marked below: 	
1040 Income Tax-Year(s) 
1120 Income Tax-Year(s) 
941 Employer's Quarterly Federal Tax Return - Quarterly period(s) 
940 Employer's Annual Federal Unemployment (FUTA) Tax Return - Year(s) 
Trust Fund Recovery Penalty as a responsible person of 	(enter corporation name) 	
for failure to pay withholding and Federal Insurance Contributions Act t\
axes (Social Security taxes), for period(s) ending 
Other Federal Tax(es) [specify type(s) and period(s)] 
Note: If you need more space, use attachment and title it "Attachment to Form \
656 dated 	." Make sure to sign and date the 
attachment. 	
Section 3  Reason for Offer 	
Doubt as to Collectibility - I have insufficient assets and income to pay the full amount. 
Exceptional Circumstances (Effective Tax Administration) - I owe this amount and have sufficient assets to pay the full amount, but\
 due to my 
exceptional circumstances, requiring full payment would cause an economi\
c hardship or would be unfair and inequitable.  I am submitting a written 
narrative explaining my circumstances. 	
www.irs.gov

Page 2 of 4 	
Section 3 	(Continued) 	Reason for Offer 	
Explanation of Circumstances (Add additional pages, if needed) 
The IRS understands that there are unplanned events or special circumsta\
nces, such as serious illness, where paying the full amount or the minim\
um 
offer amount might impair your ability to provide for yourself and your \
family.  If this is the case and you can provide documentation to prove your 
situation, then your offer may be accepted despite your financial profil\
e. Describe your situation below and attach appropriate documents to thi\
s offer 
application. 
Section 4 	Low Income Certification 	(Individuals Only) 	
Do you qualify for Low-Income Certification? You qualify if your gross monthly household income is less than or equal\
 to the amount shown in the 
chart below based on your family size and where you live. If you qualify\
, you are not required to submit any payments during the consideration o\
f your 
offer. 	
Check here if you qualify for Low-Income Certification based on the mont\
hly income guidelines below. 	
Size of family unit 	48 contiguous states and D.C. 	Hawaii 	Alaska 	
1 	$2,327 	$2,679	 $2,910 	
2 	$3,152 	$3,627	 $3,942 	
3 	$3,997 	$4,575	 $4,973 	
4 	$4,802 	$5,523	 $6,004 	
5 	$5,627 	$6,471	 $7,035 	
6 	$6,452 	$7,419	 $8,067 	
7 	$7,277 	$8,367	 $9,098 	
8 	$8,102 	$9,315 	$10,129 	
For each additional person, add	 $825	 $948	 $1,031 	
Section 5 	Payment Terms 	
Check one of the payment options below to indicate how long it will take\
 you to pay your offer in full 	
Lump Sum Cash 
Enter the amount of your offer $ 	
Check here if you will pay your offer in five or fewer payments: 
Enclose a check for 20% of the offer amount (waived if you are an indiv\
idual and met the requirements for Low-Income certification) and fill i\
n the 
amount(s) and date(s) of your future payment(s). Your offer must b\
e fully paid 24 months from the date your offer is accepted. 	
Total Offer Amount 	-	20% Initial Payment 	= 	Remaining Balance 	
$ 	-	$ 	= 	$ 	
You may pay the remaining balance in one payment after acceptance of  the offer or up to five payments. 
1) 	$ 	paid on the 	(day), 	month(s) after acceptance. 	
2) 	$ 	paid on the 	(day), 	month(s) after acceptance. 	
3) 	$ 	paid on the 	(day), 	month(s) after acceptance. 	
4) 	$ 	paid on the 	(day), 	month(s) after acceptance. 	
5) 	$ 	paid on the 	(day), 	month(s) after acceptance. 	
Periodic Payment 
Enter the amount of your offer $ 	
Check here if you will pay your offer in full in more than five monthly \
installments. 
Enclose a check for one month's installment (waived if you are an indiv\
idual and met the requirements for Low-Income certification) 
$ 	is being submitted with the Form 656 and then $ 	on the 	(day) of each month thereafter for a 	
total of 	months 	(may not exceed 23)	. Total payments must equal the total Offer Amount. 	
You must continue to make these monthly payments while the IRS is consid\
ering the offer.  Failure to make regular monthly payments
will cause your offer to be returned. 	
Catalog Number 16728N 	www.irs.gov 	Form 	656	 (Rev. 5-2012)

Page 3 of 4 	
Section 6 Designation of Down Payment and Deposit 	(Optional) 	
If you want your payment to be applied to a specific tax year and a spec\
ific tax debt, please tell us the tax form  and 
Tax Year/Quarter  . If you do not designate a preference, we will apply any money you send\
 in to the governments best interest. 
If you are paying more than the required payment when you submit your of\
fer and want any part of that payment treated as a deposit, check the bo\
x 
below and insert the amount. 
I am making a deposit of $  with this offer. 
Section 7 Source of Funds and Making Your Payment 
Tell us where you will obtain the funds to pay your offer.  You may consider borrowing from friends and/or family, taking out a loan\
, or selling assets. 
Include separate checks for the payment and application fee. 
Section 8  Offer Terms 
By submitting this offer, I/we have read, understand and agree to the fo\
llowing terms and conditions: 
Terms, Conditions, and Legal
Agreement a) I request that the IRS accept the offer amount listed in this offer \
application as payment of my outstanding tax
debt (including interest, penalties, and any additional amounts require\
d by law) as of the date listed on this form. I
authorize the IRS to amend Section 2 on page 1 in the event I failed to \
list any of my assessed tax debt. I
understand that my offer will be accepted, by law, unless IRS notifies m\
e otherwise, in writing, within 24 months of
the date my offer was received by IRS. 
IRS will keep my payments,
fees, and some refunds.  b) I voluntarily submit the payments made on this offer and understand that they are not refundable even if I
withdraw the offer or the IRS rejects or returns the offer.	

 Unless I designated how to apply the required
payment (page 3 of this application), the IRS will apply my payment in\
 the best interest of the government,
choosing which tax years and tax liabilities to pay off. The IRS will al\
so keep my application fee unless the offer is
not accepted for processing. 
c) The IRS will keep any refund, including interest, that I might be due for tax periods extendi\
ng through the
calendar year in which the IRS accepts my offer. I cannot designate that\
 the refund be applied to estimated tax
payments for the following year or the accepted offer amount. If I recei\
ve a refund after I submit this offer for any
tax period extending through the calendar year in which the IRS accepts \
my offer, I will return the refund as soon
as possible. 
d) The IRS will keep any monies it has collected prior to this offer an\
d any payments that I make relating to this
offer that I did not designate as a deposit. Only amounts that exceed th\
e mandatory payments can be treated as a
deposit. Such a deposit will be refundable if the offer is rejected or r\
eturned by the IRS or is withdrawn. I
understand that the IRS will not pay interest on any deposit.  The IRS may seize ("levy") my assets up to the time
that the IRS official signs and accepts my offer as pending. 
Pending status of an offer
and right to appeal  e) Once an authorized IRS official signs this form, my offer is conside\
red pending as of that signature date and it
remains pending until the IRS accepts, rejects, returns, or terminates m\
y offer or I withdraw my offer. An offer is
also considered pending for 30 days after any rejection of my offer by t\
he IRS, and during the time that any
rejection of my offer is being considered by the Appeals Office. An offe\
r will be considered withdrawn when the
IRS receives my written notification of withdrawal by personal delivery \
or certified mail or when I inform the IRS of
my withdrawal by other means and the IRS acknowledges in writing my inte\
nt to withdraw the offer. 
f) I waive the right to an Appeals hearing if I do not request a hearin\
g within 30 days of the date the IRS notifies
me of the decision to reject the offer. 
I must comply with my future
tax obligations and
understand I remain liable for 
the full amount of my tax
debt until all terms and 
conditions of this offer have 
been met.  g) I will file tax returns and pay required taxes for the five year per\
iod beginning with the date of acceptance of this
offer. If this is an offer being submitted for joint tax debt, and one o\
f us does not comply with future obligations,
only the non-compliant taxpayer will be in default of this agreement. 
h) The IRS will not remove the original amount of my tax debt from its \
records until I have met all the terms and
conditions of this offer. Penalty and interest will continue to accrue u\
ntil all payment terms of the offer have been
met. If I file for bankruptcy before the terms are fully met, any claim \
the IRS files in the bankruptcy proceedings
will be a tax claim. 
i) Once the IRS accepts my offer in writing, I have no right to contest\
, in court or otherwise, the amount of the tax
debt. 
I understand what will 
happen if I fail to meet the
terms of my offer (e.g.,
default).  j) If I fail to meet any of the terms of this offer, the IRS may levy o\
r sue me to collect any amount ranging from the
unpaid balance of the offer to the original amount of the tax debt witho\
ut further notice of any kind. The IRS will
continue to add interest, as Section 6601 of the Internal Revenue Code r\
equires, on the amount the IRS
determines is due after default. The IRS will add interest from the date\
 I default until I completely satisfy the
amount owed. 
I agree to waive time limits
provided by law.  k) To have my offer considered, I agree to the extension of the time li\
mit provided by law to assess my tax debt
(statutory period of assessment).  I agree that the date by which the IRS must assess my tax debt will now \
be
the date by which my debt must currently be assessed plus the period of \
time my offer is pending plus one
additional year if the IRS rejects, returns, or terminates my offer or I\
 withdraw it.  (Paragraph (e) of this section 
Catalog Number 16728N  www.irs.gov 
Form 	
656	 (Rev. 5-2012) 	
Make checks payable to the "United States Treasury" and attach to  the front of your Form 656, Offer in Compromise. All payments must be in U.S. 
dollars.  Do not send cash.  Send a separate application fee with each offer; do not comb ine it with any other tax payments, as this may delay 
processing of your offer. Your offer will be returned to you if the application fee and the required payments are not properly  remitted, or if your check is 
returned for insufficient funds.

Page 4 of 4 	
Section 8 -	(Continued) 	Offer Terms 	
defines pending and withdrawal).  I understand that I have the right not to waive the statutory period of \
assessment or to limit the waiver to a certain length or certain periods\
 or issues.  I understand, however, that the 
IRS may not consider my offer if I refuse to waive the statutory period \
of assessment or if I provide only a limited 
waiver.  I also understand that the statutory period for collecting my tax debt w\
ill be suspended during the time my 
offer is pending with the IRS, for 30 days after any rejection of my off\
er by the IRS, and during the time that any 
rejection of my offer is being considered by the Appeals Office. 	
I understand the IRS may file
a Notice of Federal Tax Lien 
on my property. 	l) The IRS may file a Notice of Federal Tax Lien during the offer inves\
tigation. The IRS may file a Notice of 
Federal Tax Lien to protect the Government's interest on offers that wil\
l be paid over time. This tax lien will be 
released when the payment terms of the accepted offer have been satisfie\
d. 	
I authorize the IRS to contact 
relevant third parties in order
to process my offer 	m) By authorizing the IRS to contact third parties including credit bur\
eaus, I understand that I will not be notified of 
which third parties the IRS contacts as part of the offer application pr\
ocess, as stated in section 7602(c) of the 
Internal Revenue Code. 	
I am submitting an offer as
an individual for a joint
liability 	n) I understand if the liability sought to be compromised is the joint \
and individual liability of myself and my 
co-obligor(s) and I am submitting this offer to compromise my individu\
al liability only, then if this offer is accepted, 
it does not release or discharge my co-obligor(s) from liability.  The United States still reserves all rights of 
collection against the co-obligor(s). 	
Section 9 	Signatures 	
Under penalties of perjury, I declare that I have examined this offer, i\
ncluding accompanying schedules and statements, and to the best of
my knowledge and belief, it is true, correct and complete. 
Signature of Taxpayer/Corporation Name 	Phone Number 	Date (mm/dd/yyyy) 	
Signature of Taxpayer/Authorized Corporate Officer 	Phone Number 	Date (mm/dd/yyyy) 	
Section 10 	Paid Preparer Use Only 	
Signature of Preparer 	Phone Number 	Date 	(mm/dd/yyyy) 	
Name of Paid Preparer 	Preparer's CAF no. or PTIN 	
Firm's Name, Address, and ZIP Code 
Include a valid, signed Form 2848 or 8821 with this application, if one \
is not on file. 
Section 11 	Third Party Designee 	
Do you want to allow another person to discuss this offer with the IRS? \
	Yes 	No 	
If yes, provide designee's name 	Telephone Number 
( 	) 	
IRS Use Only 
I accept the waiver of the statutory period of limitations on assessment\
 for the Internal Revenue Service, as described in Section 8 (k). 
Signature of Authorized Internal Revenue Service Official 	Title 	Date (mm/dd/yyyy) 	
Privacy Act Statement 	
We ask for the information on this form to carry out the internal revenu\
e laws of the United States. Our authority to request this information i\
s Section 7801 of the Internal 
Revenue Code. 
Our purpose for requesting the information is to determine if it is in t\
he best interests of the IRS to accept an offer. You are not required to\
 make an offer; however, if you 
choose to do so, you must provide all of the taxpayer information reques\
ted. Failure to provide all of the information may prevent us from proce\
ssing your request. 
If you are a paid preparer and you prepared the Form 656 for the taxpaye\
r submitting an offer, we request that you complete and sign Section 10 \
on Form 656, and provide 
identifying information. Providing this information is voluntary. This i\
nformation will be used to administer and enforce the internal revenue l\
aws of the United States and may 
be used to regulate practice before the Internal Revenue Service for tho\
se persons subject to Treasury Department Circular No. 230, Regulations \
Governing the Practice of 
Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actua\
ries, and Appraisers before the Internal Revenue Service. Information on\
 this form may be disclosed 
to the Department of Justice for civil and criminal litigation. 
We may also disclose this information to cities, states and the District\
 of Columbia for use in administering their tax laws and to combat terro\
rism. Providing false or 
fraudulent information on this form may subject you to criminal prosecut\
ion and penalties. 
Catalog Number 16728N  www.irs.gov 
Form 	656	 (Rev. 5-2012)