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Official form guide
Form 656B: Form 656 Booklet Offer in Compromise
IRS Form 656 is the Offer in Compromise application that lets taxpayers propose to settle tax debt for less than owed. It requires filing all required returns, a $205 fee (unless low‑income), and an initial payment.
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IRS Form 656B - Form 656 Booklet Offer in Compromise
IRS Form 656 is the Offer in Compromise application that lets taxpayers propose to settle tax debt for less than owed. It requires filing all required returns, a $205 fee (unless low‑income), and an initial payment.
Risk Radar
Scan points- 1Sending a payment with your application when you qualify for low‑income certification causes immediate rejection.
- 2Submitting the offer without having filed all required tax returns first.
- 3Including an initial payment when you meet Low‑Income Certification guidelines.
- 4Omitting the $205 application fee when not eligible for a low‑income exemption.
- 5Failing to attach a completed Form 433‑A when you are an individual taxpayer.
Plain English
Form 656 lets you ask the IRS to accept less than the full amount you owe. You must have filed all required returns, paid any required estimated taxes, and include the $205 fee unless you qualify for a low‑income exemption. You can submit it online or mail it to the IRS Offer in Compromise unit. The IRS will keep charging interest and penalties while it reviews your offer.
Submission Date
- Filing date: 2026-04-18 11:10:37
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when you are proposing an Offer in Compromise to settle tax debt after resolving any doubt as to liability, collectibility, or effective tax administration.
- Do not use it when you still have unresolved doubt about liability or collectibility, or when a business’s trust fund tax portion is unpaid and the Trust Fund Recovery Penalty has not been determined (unless you are a payroll fraud victim).
- Check Form 433-A (OIC) instead when you are an individual (wage earner or self‑employed) needing to provide a collection information statement.
Form selector
Use this form or another form?
Unresolved doubt about tax liability
Offer cannot be considered if doubt not resolved
✓ Confirm liability is settled before filing
Business with unpaid trust fund tax and no TFRP determination
Business not eligible for OIC without trust fund paid or TFRP determination (except payroll fraud victim)
✓ Verify trust fund portion is paid or TFRP is determined
Individual needing to provide detailed financial info
Required collection information statement for wage earners/self‑employed
✓ Ensure Form 433‑A is completed and signed
Deadline or filing window
Not stated in the official source
Checklist
What you need before filling it out
Application fee field
$205 payment · Form 656 fee section
Initial offer payment
Payment amount based on chosen option · Form 656 payment schedule
Business asset information
List of assets, market values, loan balances · Section 3 of Form 433-B (OIC)
Personal asset information
Description, market value, loan balance · Section 3 of Form 433-A (OIC)
Tax years and type of tax
Tax years and tax type being compromised · Form 656 identification section
Before you submit
- 1Verify no simultaneous Doubt as to Liability and Doubt as to Collectibility offers are being submitted.
- 2Ensure the trust fund portion is paid or a Trust Fund Recovery Penalty determination is made (unless you are a payroll fraud victim).
- 3Confirm the $205 fee is attached unless low‑income certification applies.
- 4Attach copies of all required documentation; do not send original documents.
- 5Include completed and signed Form 433-A if you are an individual, or Form 433-B if you are a business.
- 6Fill out Form 656 with tax years, tax type, offer amount, and payment terms.
- 7Round all monetary entries to the nearest dollar and replace any negative numbers with “0”.
- 8Sign Form 656 and all supporting forms.
- 9Keep copies of the entire packet for your records.
How to file this form
- 1Gather required financial documentation and asset lists.
- 2Complete Form 433-A (OIC) or Form 433-B (OIC) as applicable and sign them.
- 3Fill out Form 656, indicating tax years, tax type, offer amount, and payment terms.
- 4Attach the $205 application fee (or exemption proof) and all supporting copies.
- 5Assemble the complete packet and retain a duplicate for your records.
- 6Mail the packet to the IRS processing center and obtain a mailing receipt or tracking confirmation.
Known limitations
- 1Cannot be used when both a Doubt as to Liability and a Doubt as to Collectibility offer are submitted together.
- 2Businesses are ineligible unless the trust fund portion is paid or a Trust Fund Recovery Penalty determination is made (except for payroll fraud victims).
- 3The right to appeal exists only if the IRS rejects the offer; there is no right to appeal if the IRS returns the offer.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition of Form 656 Booklet Offer in Compromise is dated 04/26. No change details are provided in the source.
What changed or needs a fresh check
- Edition date — confirm it reads 04/26
- Fee — confirm $205 application fee unless low‑income certification guidelines apply
- Mailing address — Not stated in the official source — verify on the agency site
- Signature — confirm Form 656 and all supporting forms are signed
- Attachments — confirm copies of required documents are attached, not originals
Quick Facts
Downloads
After you file
- 1Retain a copy of the entire submission for at least three years.
- 2Continue filing and paying all required tax returns and estimated payments.
- 3Monitor for IRS correspondence regarding acceptance, rejection, or requests for additional information.
- 4If the offer is rejected, consider filing an appeal within the allowed period.
- 5Pay any accrued penalties and interest while the offer is under consideration.
- 6Correct any errors by submitting a revised Form 656 with updated information.
Sources
- SRCForm p.6 — application fee $205 unless low‑income certification guidelines apply.
- SRCForm p.6 — required forms: Form 656, Form 433‑A (OIC) if applicable, Form 433‑B (OIC) if applicable.
- SRCForm p.4 — do not submit both an offer under Doubt as to Liability and an offer under Doubt as to Collectibility or Effective Tax Administration at the same time.
- SRCForm p.4 — business not eligible unless trust fund portion paid or Trust Fund Recovery Penalty determination made (except payroll fraud victim).
- SRCForm p.4 — right to appeal if IRS rejects offer; no right to appeal if IRS returns offer.
- SRCForm p.7 — attach copies of required documentation with Forms 433‑A/B; do not send original documents.
- SRCForm p.10 — round monetary entries to the nearest dollar; enter "0" for negative numbers.
- SRCForm p.12 — business asset information must exclude personal assets; list assets and round to nearest dollar.
- SRCNot stated in the official source — mailing address for submission.
- SRCNot stated in the official source — edition date of Form 656 (given as 04/26).
Common confusion points
Can I submit both a Doubt as to Liability and a Doubt as to Collectibility offer?
Filers think covering all doubts is allowed.
→ Verify only one type of doubt is being addressed.
Do I need to pay the $205 fee if I qualify for low‑income?
Misunderstanding of exemption criteria.
→ Confirm low‑income certification guidelines apply before omitting the fee.
Do I need to include personal assets in the business asset section?
Overlap between personal and business asset sections.
→ List personal assets only on Form 433‑A, not on Form 433‑B.
What if I have a negative asset value?
Users may enter negative numbers.
→ Enter “0” for any negative monetary entry.
Do I have a right to appeal if the IRS returns my offer?
Confusion about appeal rights.
→ Remember appeal is only available if the IRS rejects, not if it returns the offer.
Do I need to send original documents?
Belief that originals are required.
→ Attach only copies of supporting documents, not originals.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 656 – submit an appeal if the IRS rejects the offer.
Questions about IRS Form 656B
What is IRS Form 656B used for?
Form 656 lets you ask the IRS to accept less than the full amount you owe. You must have filed all required returns, paid any required estimated taxes, and include the $205 fee unless you qualify for a low‑income exemption. You can submit it online or mail it to the IRS Offer in Compromise unit. The IRS will keep charging interest and penalties while it reviews your offer.
Who must file IRS Form 656B?
Individual taxpayers and business owners who are proposing an Offer in Compromise for a tax debt must file IRS Form 656.
What information does IRS Form 656B require?
The form gathers the proposed settlement amount, the $205 application fee (unless low‑income), an initial offer payment (unless low‑income), and requires the completed and signed Form 433‑A for individuals or Form 433‑B for businesses.
Where do I file IRS Form 656B?
Individual taxpayers may apply online using the Individual Online Account; if not applying online, they must mail the application package to the Centralized Offer in Compromise Unit at either the Memphis or Brookhaven IRS Center, depending on the state of residence.
How do I complete IRS Form 656B?
First, file all required tax returns, pay any required estimated taxes, and make required federal tax deposits if you own a business. Then assemble the application package with Form 656, the appropriate Form 433‑A or 433‑B, the $205 fee (unless exempt), and any initial payment (unless exempt). Sign all forms, keep a copy for your records, and submit the package online via the Individual Online Account or mail it to the correct Centralized Offer in Compromise Unit.
What happens if IRS Form 656B is filed incorrectly?
If the IRS returns your offer, penalties and interest continue to accrue, and any initial payment you sent will be applied to the tax debt with the fee returned, and you have no right to appeal that decision.
Can I submit both a Doubt as to Liability and a Doubt as to Collectibility offer?
Filers think covering all doubts is allowed. Verify only one type of doubt is being addressed.
Do I need to pay the $205 fee if I qualify for low‑income?
Misunderstanding of exemption criteria. Confirm low‑income certification guidelines apply before omitting the fee.
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