What does form 656 do with the IRS? I haven't paid taxes for year 2004 and 2005.?

Question

What does IRS FORM 656 do? Will I be getting some sort of discount to pay off my balance of taxes due from 2004 and 2005 if I fill out that form?

Answer 1

A form 656 is an Offer In Compromise, You would complete the entire form and make a reasonable offer to pay less than the total amount that you owe, The IRS will review the financial information that you provide and either accept or deny the offer. Make sure to read through the instruction completely. If you are currently on a payment plan you need to continue to make your monthly payments as promised. If you are not on a payment plan you need to call the IRS and set up a payment plan until the IRS makes a determination on your offer.

http://www.irs.gov/businesses/small/article/0,,id=109622,00.html

http://www.irs.gov/pub/irs-pdf/f656.pdf
Call 1-800-829-0922 Mon-Fri 7am to 10pm

Answer 2

Before you can consider a Form 656 (Offer in Compromise), you need to file actual returns for both 2004 and 2005. That will determine how much you actually owe. If you have no assets an can not earn enough income to pay your debt in a reasonable amount of time, the IRS will consider an offer in compromise to settle your debt. My guess it that Judy is correct and your odds of having an offer excepted are quite low. An installment payment plan may be better in your case.

Answer 3

The Form 656 is the IRS offer in compromise form. The offer in compromise is the IRS program that allows taxpayers to pay their tax liability by making (1) a lump sum payment or (2) periodic payments over time.

The offer in compromise has nothing to do with how much tax you owe (other than setting the max that the IRS can collect); rather, the offer in compromise program looks at what you can afford to pay.

The IRS uses a mechanical formula to determine how much you can pay, which is essentially the fire sale value of your assets less your monthly disposable income (times the number of months you are going to pay the liability over -- with a max of five years).

If you have no assets and/or no disposable income (according to IRS guidelines) then you may only have to "pay pennies on the dollar."

Other alternatives may include discharging the tax debt in bankruptcy, entering into an installment agreement, and/or obtaining "hardship" or "non-collectible" status.

You can find out more about the offer in compromise program here: http://www.irstaxtrouble.com/offer_in_compromise.php


Best of luck,



Kreig Mitchell
http://www.irstaxtrouble.com/longmont-colorado-tax-attorney.php

Answer 4

It takes a lot more than just filling out the form. The IRS has to accept your offer in compromise. If they feel that you'd eventually be able to pay more of the debt than you're offering, that's not likely to happen. But you can give it a try.
Realize that there's a fee of $150 to even submit the offer, so don't do it unless you probably would not ever be able to pay off more than you're offering.

Answer 5

You won't be getting a discount; in fact, you'll probably pay a penalty. This is a form you file when you've not paid your taxes and you want to make an offer to pay less than the total owed. Don't get too hopeful--it's getting tougher to make a deal with the IRS.

Answer 6

form 656 is Offer in Compromise

Answer 7

Federal taxes paid, no remember if for the present twelve months or previous years, are by no ability a deduction on the federal return. If by employing some hazard you reside in Iowa, you could deduct Federal taxes paid on your state return.

Answer 8

This topic is worth everyone's attention

Answer 9

This video might help you it helped
alot of others.

http://video.google.com/videoplay?docid=-4312730277175242198%20&q=america+freedom+to+facisim&hl=en