IRS Form 656-L Offer in Compromise (Doubt as to Liability)

What Is IRS Form 656-L?

This is a tax form that was released by the Internal Revenue Service (IRS) - a subdivision of the U.S. Department of the Treasury on January 1, 2018. As of today, no separate filing guidelines for the form are provided by the IRS.

FAQ

Q: What is IRS Form 656-L?
A: IRS Form 656-L is used for making an Offer in Compromise (OIC) when you have doubt as to the amount of tax liability you owe. It is specifically for resolving tax disputes related to the amount owed.

Q: What is an Offer in Compromise (OIC)?
A: An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS to settle a tax debt for less than the full amount owed. It allows taxpayers who are unable to pay their tax debt in full to make a compromise settlement.

Q: When should I use Form 656-L?
A: You should use Form 656-L if you have a legitimate doubt as to the amount of tax you owe and want to request an Offer in Compromise based on that doubt.

Q: Is doubt as to liability the only basis for an Offer in Compromise?
A: No, doubt as to liability is just one of the bases for an Offer in Compromise. There are other categories, such as doubt as to collectibility and effective tax administration, that can also be used to request an OIC.

Q: What supporting documentation is required with Form 656-L?
A: When submitting Form 656-L, you must include detailed information and supporting documentation to explain your doubt as to liability, such as legal arguments, written statements, or other evidence.

Q: What happens after I submit Form 656-L?
A: After you submit Form 656-L and the supporting documentation, the IRS will review your offer and make a decision. If your offer is accepted, you will need to fulfill the terms of the agreement to fully resolve your tax liability.

Q: Can I negotiate the amount I propose in an Offer in Compromise?
A: Yes, you can negotiate the amount you propose in an Offer in Compromise with the IRS. However, the IRS will consider various factors, such as your income, expenses, and assets, in determining the acceptability of your offer.

Q: What if my Offer in Compromise is rejected?
A: If your Offer in Compromise is rejected, you have the right to appeal the decision. The IRS will provide you with information on how to appeal and further options for resolution.

Q: Can I hire a tax professional to assist with my Offer in Compromise?
A: Yes, you can hire a tax professional, such as a tax attorney or enrolled agent, to assist you with your Offer in Compromise. They can help navigate the process, provide guidance, and improve the chances of a successful resolution.