656 Form 2012

What is the 656 Form

The 656 Form, also known as the Offer in Compromise, is a crucial document used by taxpayers in the United States to settle their tax debts with the Internal Revenue Service (IRS). This form allows individuals to propose a settlement amount that is less than the total tax owed. By submitting the 656 Form, taxpayers can seek relief from their tax liabilities based on their financial situation. The IRS reviews the application to determine whether the proposed offer is acceptable, considering factors such as income, expenses, and asset value.

How to use the 656 Form

Using the 656 Form involves several steps to ensure a successful submission. First, taxpayers must gather all necessary financial information, including income, expenses, and asset details. This information is essential for completing the form accurately. Next, individuals should fill out the form, providing all required details, including personal information and the proposed offer amount. Once completed, the form must be submitted to the IRS along with the appropriate payment for the application fee. It is important to keep copies of all documents submitted for personal records.

Steps to complete the 656 Form

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

1. Gather financial documents, including income statements, bank statements, and expense records.
2. Download the 656 Form from the IRS website or obtain a physical copy.
3. Fill out the form, ensuring that all sections are completed accurately.
4. Calculate your offer amount based on your financial situation.
5. Include the appropriate application fee with your submission.
6. Review the form for accuracy and completeness before sending it to the IRS.

Legal use of the 656 Form

The 656 Form is legally binding once it is accepted by the IRS. It is essential to understand that submitting this form does not guarantee acceptance. The IRS will evaluate the offer based on established guidelines and the taxpayer's financial circumstances. If the offer is accepted, the taxpayer will be required to adhere to the terms outlined in the agreement, including making the agreed-upon payments. Failure to comply with these terms may result in the reinstatement of the original tax liability.

Required Documents

When submitting the 656 Form, specific documents must accompany the application to support the proposed offer. These documents typically include:

• Proof of income, such as pay stubs or tax returns.
• Documentation of monthly expenses, including bills and statements.
• Asset information, such as bank statements and property valuations.
• Any additional information that demonstrates financial hardship.

Filing Deadlines / Important Dates

Timeliness is critical when submitting the 656 Form. While there are no specific deadlines for submitting the form itself, taxpayers should be aware of any deadlines related to their tax liabilities. It is advisable to submit the form as soon as possible if facing financial difficulties. Additionally, the IRS may have specific timelines for responding to offers, typically within a few months. Keeping track of these timelines can help ensure compliance and facilitate a smoother resolution process.