The Internal Revenue Service Form 656, Offer in Compromise, requires the applicant's personal contact information, a list of tax periods to include in the offer, an explanation of the reason the offer is needed and requested payment terms, according to the IRS. Business owners must provide business information and joint filers must include information about both taxpayers.Continue Reading
In addition to Form 656, individuals requesting an offer in compromise for federal income taxes must also complete and submit Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, notes the IRS. The form requests asset and income information, and details about members of the household and household expenses. Business owners must submit Form 433-B, which requests information about the business assets and expenses. Documents verifying the information are also required.
An application fee and initial payment are required along with the forms and documents, explains the IRS. Individuals and sole proprietors who qualify for low-income certification may not need to submit an application fee or initial payment with the application. Section four of Form 656 assists applicants in determining eligibility. The Form 656 Offer in Compromise Booklet, which includes all necessary forms and instructions, is available online at IRS.gov by entering the phrase "Form 656" into the search box at the top right of the home page. Selecting "Offer in Compromise" from the search results displays the booklet.Learn more about Taxes