A newly revised taxpayer application for an offer in compromise, the Form 656 package, is now available. The package has been redesigned to make it easier for taxpayers to follow the instructions for, and correctly prepare the application for, an agreement.

An offer in compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax liability. Under certain circumstances, the IRS has the authority to settle federal tax liabilities by accepting less than full payment.

The new form also includes a signature block for the tax practitioner (if any) employed by the taxpayer to prepare the application form. This paid preparer signature block has been added to discourage unscrupulous promoters who falsely market offers in compromise to taxpayers as a "pennies on the dollar" approach.

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...back to 28 October 2004

Further information:
www.irs.gov/newsroom/article/0,,id=130491,00.html
www.irs.gov/newsroom/article/0,,id=130493,00.html