Form 656

Full Definition

Form 656, Offer in Compromise, is the official form used to submit a settlement offer to the IRS. The form requires you to specify the amount you're offering to pay, choose between lump sum or periodic payment options, and provide information about the tax years or periods covered. Form 656 must be submitted with Form 433-A (or 433-B for businesses), the application fee ($205 unless you qualify for low-income waiver), and an initial payment. The IRS reviews the complete OIC package to determine if your offer is acceptable.