Form 656 B, Offer in Compromise Instructions 2024

What is the IRS Form 656 B?

The IRS Form 656 B is an official document used to submit an Offer in Compromise (OIC) to the Internal Revenue Service. This form allows taxpayers to propose a settlement for their tax liabilities for less than the full amount owed. The OIC program is designed for individuals who may be unable to pay their tax debts in full or for whom paying the full amount would create a financial hardship. Understanding the purpose and function of Form 656 B is essential for anyone considering this option for tax debt resolution.

Steps to Complete the IRS Form 656 B

Completing the IRS Form 656 B involves several important steps to ensure accuracy and compliance. Here’s a detailed outline:

• Begin by gathering all necessary financial documentation, including income statements, bank statements, and any other relevant financial information.
• Fill out the taxpayer information section with your name, Social Security number, and address.
• Indicate the type of tax debt you are addressing and the amount owed.
• Complete the Offer in Compromise section, specifying your offer amount and the reason for your request.
• Sign and date the form, ensuring all information is accurate and complete.

Review the form thoroughly before submission to avoid any delays in processing.

Required Documents for IRS Form 656 B

When submitting the IRS Form 656 B, certain documents must accompany the form to support your Offer in Compromise. These documents include:

• Proof of income, such as recent pay stubs or tax returns.
• Bank statements that reflect your financial status.
• A completed Form 433-A (OIC) or Form 433-B (OIC), which provides detailed financial information.
• Any additional documentation that supports your claim of financial hardship.

Providing complete and accurate documentation is crucial for the IRS to evaluate your offer effectively.

Eligibility Criteria for IRS Form 656 B

To qualify for submitting an Offer in Compromise using Form 656 B, certain eligibility criteria must be met. These include:

• You must have filed all required tax returns for the previous five years.
• You cannot be in an open bankruptcy proceeding.
• Your offer must be based on your ability to pay, taking into account your financial situation.
• The IRS must determine that accepting your offer is in the best interest of both parties.

Understanding these criteria helps ensure that your application is viable and increases the likelihood of acceptance.

How to Obtain the IRS Form 656 B

The IRS Form 656 B can be obtained directly from the IRS website. It is available as a fillable PDF, which allows you to complete the form electronically. Additionally, you can request a paper version by contacting the IRS or visiting a local IRS office. Ensure you have the most current version of the form to avoid any issues during submission.

Filing Methods for IRS Form 656 B

There are several methods for submitting the IRS Form 656 B, including:

• Online submission through the IRS website, if you are using an electronic version.
• Mailing the completed form and supporting documents to the appropriate IRS address as specified in the form instructions.
• In-person submission at a local IRS office, which may provide immediate feedback on your application.

Choosing the right filing method can impact the processing time of your offer.