Form 656-L (Offer in Compromise, Doubt as to Liability)
The offer form for disputing that you owe the tax at all. No application fee, no deposit, and a different form from the ability-to-pay offer.
Full Definition
Form 656-L is the offer in compromise form used where the dispute is about whether the tax is owed, rather than about whether it can be paid.
The IRS defines the ground: "DATL exists where there is a genuine dispute as to the existence of or the amount of the correct tax debt under the law."
It states two circumstances in which a doubt-as-to-liability offer cannot be considered: where the liability has been established by a final court decision or judgment, and where the assessed tax is based on current law.
The money side is unlike the ability-to-pay offer. The IRS states you must submit an offer for $1.00 or more or the submission will be returned without processing; that no deposit or application fee is required for a doubt-as-to-liability offer; and that payments received will not be returned and will be applied to the tax liability. It says explicitly not to include any payment with the form.
What it requires instead is evidence: a written statement explaining why all or part of the tax debt is incorrect, with supporting documentation. The IRS states that failure to provide that explanation and documentation "will result in the return of your offer without further consideration".
And the instruction people most need: "If you agree that you owe the tax but cannot afford to pay, DON\'T FILE a Form 656-L." That is the other offer, on Form 656.
One sequencing rule is easy to trip over. The IRS states that if you are already working with it or responding to a notice on the same issue, you must resolve those matters first, and that if another IRS function is addressing the liability — audit reconsideration, for example — you must wait until that process is complete. Failure to do so may result in the offer being returned.
What to do next
Establish which offer you are making before anything else. Doubt as to liability disputes whether the tax is right; doubt as to collectibility accepts the tax and disputes the ability to pay. They are different forms, different evidence, and only one carries an application fee.
Sources
- Form 656-L, Offer in Compromise (Doubt as to Liability) — Internal Revenue Service, retrieved 2026-08-21
- Offer in compromise — Internal Revenue Service, retrieved 2026-08-20
Last reviewed 2026-08-21 by Tax Resolution Clarity editorial.
Sourced to primary IRS materials and editorially reviewed. Not reviewed by a tax professional. Not tax advice.
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Where to go next
The IRS publishes the rules this page describes. Your own notice governs your dates.