Understanding the Purpose of Form 656
Form 656 serves as the official application for individuals or businesses seeking an OIC from the IRS. It provides detailed information about the taxpayer's financial situation, supporting their request for a reduced settlement amount. The purpose of Form 656 is to demonstrate to the IRS that the taxpayer is unable to pay the full tax debt within a reasonable timeframe, making a compromised settlement the best resolution.
Gathering the Necessary Documentation
Before tackling Form 656, it is crucial to gather all the necessary documentation. This includes: