Form 656 B Rev 2 Form 656 Booklet Offer in Compromise 2016

What is the Form 656 B Rev 2 Form 656 Booklet Offer In Compromise

The Form 656 B Rev 2, also known as the Form 656 Booklet Offer In Compromise, is a document used by taxpayers in the United States to negotiate a settlement with the Internal Revenue Service (IRS) regarding their tax liabilities. This form allows individuals to propose a reduced amount to settle their tax debts when they are unable to pay the full amount owed. The Offer In Compromise program is designed for taxpayers who demonstrate that paying the full tax liability would cause financial hardship.

How to use the Form 656 B Rev 2 Form 656 Booklet Offer In Compromise

Using the Form 656 B Rev 2 involves several steps. First, taxpayers must determine their eligibility based on their financial situation. Once eligibility is established, the taxpayer can fill out the form, providing detailed information about their income, expenses, and assets. It is essential to be thorough and accurate when completing the form, as any discrepancies can lead to delays or denials. After filling out the form, it should be submitted to the IRS along with the required payment and supporting documentation.

Steps to complete the Form 656 B Rev 2 Form 656 Booklet Offer In Compromise

Completing the Form 656 B Rev 2 requires careful attention to detail. Here are the steps to follow:

• Review the eligibility criteria to ensure you qualify for an Offer In Compromise.
• Gather necessary financial documents, including income statements, expense reports, and asset valuations.
• Fill out the form accurately, providing all required information, including personal details and financial data.
• Calculate the offer amount based on your ability to pay, ensuring it is reasonable and justifiable.
• Submit the completed form along with any required fees and supporting documents to the IRS.

Legal use of the Form 656 B Rev 2 Form 656 Booklet Offer In Compromise

The legal use of the Form 656 B Rev 2 is governed by IRS regulations. It is essential for taxpayers to understand that submitting this form does not automatically guarantee acceptance of the offer. The IRS will review the submitted information and may request additional documentation. If the offer is accepted, it becomes a legally binding agreement, and the taxpayer must adhere to the terms outlined in the acceptance letter.

Eligibility Criteria

To qualify for submitting the Form 656 B Rev 2, taxpayers must meet specific eligibility criteria set by the IRS. These criteria include demonstrating an inability to pay the full tax liability, having filed all required tax returns, and not being in an open bankruptcy proceeding. Additionally, the taxpayer's financial situation must show that paying the full amount would create undue hardship.

Required Documents

When submitting the Form 656 B Rev 2, several documents are required to support the claim. These typically include:

• Proof of income, such as pay stubs or tax returns.
• Documentation of monthly expenses, including bills and living costs.
• Asset statements, such as bank statements or property valuations.
• Any other relevant financial information that demonstrates the taxpayer's financial situation.