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Form 656b: Form 656 Booklet Offer in Compromise

Use Tax Form 656b: Form 656 Booklet Offer in Compromise as a stand alone tax form calculator to quickly calculate specific amounts for your 2018 tax return. Form 656b: Form 656 Booklet Offer in Compromise is also integrated into our comprehensive US Tax Calculator where you can complete and save your calculations for later use. Alternatively you can use one of our Combined Federal and State Tax Estimator to quickly calculate your salary, tax and take home pay.

Form 656 Booklet Offer in Compromise
Section 1   Personal and Household Information




Marital status


Do you:





Provide information about your spouse.




Provide information for all other persons in the household or claimed as a dependent.
NameAgeRelationshipClaimed as a dependent on your Form 1040?Contributes to household income?
Section 2   Employment Information for Wage Earners
Complete this section if you or your spouse are wage earners and received a Form W-2. If you or your spouse have self-employment income (that is you file a Schedule C, E, F, etc.) instead of, or in addition to wage income, you must also complete Business Information in Sections 4, 5, and 6.


Do you have an ownership interest in this business?
If yes, check the business interest that applies:

How long with this employer


Does your spouse have an ownership interest in this business?
If yes, check the business interest that applies:

How long with this employer
Section 3   Personal Asset Information
Use the most current statement for each type of account, such as checking, savings, money market and online accounts, stored value cards (such as, a payroll card from an employer), investment and retirement accounts (IRAs, Keogh, 401(k) plans, stocks, bonds, mutual funds, certificates of deposit), life insurance policies that have a cash value, and safe deposit boxes. Asset value is subject to adjustment by IRS based on individual circumstances. Enter the total amount available for each of the following (if additional space is needed include attachments).
Round to the nearest dollar. Do not enter a negative number. If any line item is a negative number, enter "0".
Cash and Investments (domestic and foreign)




(1c) $
(1) $
Investment Account:


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =
Investment Account:


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =
(2c) $
(2) $
Retirement Account:


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =
Retirement Account:


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =
(3c) $
(3) $
Cash Value of Life Insurance Policies


Current Cash Value   Minus Loan Balance
$ - $ =
Total cash value of life insurance policies from attachment   Minus Loan Balance(s)
$ - $ =
(4) $

Primary Residence





Current Market Value   Minus Loan Balance (Mortgages, etc.)
$ X0.8 = $ - $ (Total Value of Real Estate) =

Primary Residence





Current Market Value   Minus Loan Balance (Mortgages, etc.)
$ X0.8 = $ - $ (Total Value of Real Estate) =
(5c) $
(5) $
Vehicles (Enter information about any cars, boats, motorcycles, etc. that you own or lease)








$
Current Market Value   Minus Loan Balance (Mortgages, etc.)
$ X0.8 = $ - $ Total value of vehicle (if the vehicle is leased, enter 0 as the total value) =
(6b) $








$
Current Market Value   Minus Loan Balance (Mortgages, etc.)
$ X0.8 = $ - $ Total value of vehicle (if the vehicle is leased, enter 0 as the total value) =
(6d) $
(6e) $
(6) $
Other valuable items (artwork, collections, jewelry, items of value in safe deposit boxes, interest in a company or business that is not publicly traded, etc.) Note: Do not include clothing, furniture and other personal effects.

Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =

Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =
(7c) $
(7) $
Do not include amount on the lines with a letter beside the number. Round to the nearest whole dollar.
Do not enter a negative number. If any line item is a negative, enter "0" on that line.
Box A
Available Individual Equity in Assets
$
NOTE: If you or your spouse are self-employed, Sections 4, 5, and 6 must be completed before continuing with Sections 7 and 8.
Section 4   Self-Employed Information
If you or your spouse are self-employed (e.g., files Schedule(s) C, E, F, etc.), complete this section.
Is your business a sole proprietorship?










$
Do you or your spouse have any other business interests? Include any interest in an LLC, LLP, corporation, partnership, etc.





Type of business (Select one)
Section 5   Business Asset Information (for Self-Employed)
List business assets such as bank accounts, tools, books, machinery, equipment, business vehicles and real property that is owned/leased/rented. If additional space is needed, attach a list of items. Do not include personal assets listed in Section 3.
Round to the nearest whole dollar. Do not enter a negative number. If any line item is a negative number, enter "0".




(8c) $
(8) $

Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ (if leased or used in the production of income, enter 0 as the total value) =
Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ (if leased or used in the production of income, enter 0 as the total value) =
(9c) $
(9) $
(10) $
(11) $
Notes Receivable
Do you have notes receivable?
If yes, attach current listing that includes name(s) and amount of note(s) receivable.
Accounts Receivable
Do you have accounts receivable, including e-payment, factoring companies, and any bartering or online auction accounts?
If yes, you may be asked to provide a list of your account(s) receivable
Do not include amounts from the lines with a letter beside the number [for example: (9c)].
Round to the nearest whole dollar.
Do not enter a negative number. If any line item is a negative, enter "0" on that line.
Box B
Available Business Equity in Assets
$
Section 6   Business Income and Expense Information (for Self-Employed)
If you provide a current profit and loss (P&L) statement for the information below, enter the total gross monthly income on line 17 and your monthly expenses on line 29 below. Do not complete lines (12) - (16) and (18) - (28). You may use the amounts claimed for income and expenses on your most recent Schedule C; however, if the amount has changed significantly within the past year, a current P&L should be submitted to substantiate the claim.
Round to the nearest whole dollar. Do not enter a negative number. If any line item is a negative number, enter "0".
Business Income (You may average 6-12 months income/receipts to determine your Gross monthly income/receipts.)
(12) $
(13) $
(14) $
(15) $
(16) $
(17) $
Business Expenses (You may average 6-12 months expenses to determine your average expenses.)
(18) $
(19) $
(20) $
(21) $
(22) $
(23) $
(24) $
(25) $
(26) $
(27) $
(28) $
(29) $
Round to the nearest whole dollar.
Do not enter a negative number. If any line item is a negative, enter "0" on that line.
Box C
Net Business Income
$
Section 7   Monthly Household Income and Expense Information
Enter your household's gross monthly income. The information below is for yourself, your spouse, and anyone else who contributes to your household's income. The entire household includes spouse, non-liable spouse, significant other, children, and others who contribute to the household. This is necessary for the IRS to accurately evaluate your offer.
Monthly Household Income
Note: Entire household income should also include income that is considered not taxable and may not be included on your tax return.
Round to the nearest whole dollar.
Primary taxpayer(30) $
Gross WagesSocial SecurityPension(s)Other Income (e.g. unemployment)
$+ $+ $+ $ Total primary taxpayer income =
Spouse(31) $
Gross WagesSocial SecurityPension(s)Other Income (e.g. unemployment)
$+ $+ $+ $ Total primary taxpayer income =
(32) $
(33) $$
(34) $$
(35) $$
(36) $$
(37) $$
(38) $$
Round to the nearest whole dollar.
Do not enter a negative number. If any line item is a negative, enter "0" on that line.
Box D
Total Household Income
$
Monthly Household Expenses
Enter your average monthly expenses.
Note: For expenses claimed in boxes (39) and (45) only, you should list the full amount of the allowable standard even if the actual amount you pay is less. You may find the allowable standards at http://www.irs.gov/Businesses/Small-Businesses-&Self-Employed/Collection-Financial-Standards.
(39) $
(40) $
(41) $
(42) $
(43) $
(44) $
(45) $
(46) $
(47) $
(48) $
(49) $
(50) $
(51) $
Round to the nearest whole dollar.
Do not enter a negative number. If any line item is a negative, enter "0" on that line.
Box E
Total Household Expenses
$
Round to the nearest whole dollar.
Do not enter a negative number. If any line item is a negative, enter "0" on that line.
Box F
Remaining Monthly Income
$
Section 8   Calculate Your Minimum Offer Amount
The next steps calculate your minimum offer amount. The amount of time you take to pay your offer in full will affect your minimum offer amount. Paying over a shorter period of time will result in a smaller minimum offer amount.
Note: The multipliers below (12 and 24) and the calculated offer amount do not apply if IRS determines you have the ability to pay your tax debt in full within the legal period to collect.
Round to the nearest whole dollar.
If you will pay your offer in 5 or fewer payments within 5 months or less, multiply "Remaining Monthly Income" (Box F) by 12 to get "Future Remaining Income" (Box G). Do not enter a number less than $0.

$
X 12 =
$
If you will pay your offer in 6 to 24 months, multiply "Remaining Monthly Income" (Box F) by 24 to get "Future Remaining Income" (Box H). Do not enter a number less than $0.

$
X 24 =
$
Determine your minimum offer amount by adding the total available assets from Box A and Box B (if applicable) to the amount in either Box G or Box H.

$
+
$
=
$
If you cannot pay the Offer Amount shown above due to special circumstances, explain on the Form 656, Offer in Compromise, Section 1, Low Income Certification. You must offer an amount more than $0.
Section 9   Other Information
Additional information IRS needs to consider settlement of your tax debt. If you or your business are currently in a bankruptcy proceeding, you are not eligible to apply for an offer.
Are you the beneficiary of a trust, estate, or life insurance policy?
Are you currently in bankruptcy?
Have you filed bankruptcy in the past 10 years?


Are you or have you been party to a lawsuit?


Are you or have you been party to any lawsuits involving the IRS/United States (including any suits regarding tax matters)?


In the past 10 years, have you transferred any assets for less than their full value?


In the past 3 years have you transferred any real property (land, house, etc.)?


Have you lived outside the U.S. for 6 months or longer in the past 10 years?
Do you have any assets or own any real property outside the U.S.?


Do you have any funds being held in trust by a third party?
$
Section 10   Signatures
Under penalties of perjury, I declare that I have examined this offer, including accompanying documents, and to the best of my knowledge it is true, correct, and complete.
Remember to include all applicable attachments listed below.
Form 433-B (OIC)
(Rev. March 2017)
Department of the Treasury — Internal Revenue Service
Collection Information Statement for Businesses
Complete this form if your business is a
  ▸ Corporation   ▸ Limited Liability Company (LLC) classified as a corporation
  ▸ Partnership   ▸ Other multi-owner/multi-member LLC
Note: If your business is a sole proprietorship or a disregarded single member LLC taxed as a sole proprietor (filing Schedule C, D, E, F, etc.), do not use this form. Instead, complete Form 433-A (OIC) Collection Information Statement for Wage Earners and Self-Employed Individuals. This form should only be used with the Form 656, Offer in Compromise.
Include attachments if additional space is needed to respond completely to any question.
Section 1   Business Information










Does the business outsource its payroll processing and tax return preparation for a fee?

Federal Contractor



$
Provide information about all partners, officers, LLC members, major shareholders (foreign and domestic), etc., associated with the business. Include attachments if additional space is needed.
























Section 2   Business Asset Information
Gather the most current statement from banks, lenders on loans, mortgages (including second mortgages), monthly payments, loan balances, and accountant's depreciation schedules, if applicable. Also, include make/model/year/mileage of vehicles and current value of business assets. To estimate the current value, you may consult resources like Kelley Blue Book (www.kbb.com), NADA (www.nada.com), local real estate postings of properties similar to yours, and any other websites or publications that show what the business assets would be worth if you were to sell them. Asset value is subject to adjustment by IRS. Enter the total amount available for each of the following (if additional space is needed, please include attachments).
Round to the nearest dollar. Do not enter a negative number. If any line item is a negative number, enter "0".
Cash and Investments (domestic and foreign)
$


$


$


(1d) $
(1) $
Investment Account:


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =
Investment Account:


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ =
(2c) $
(2) $
Notes Receivable
Do you have notes receivable?  
If yes, attach current listing which includes name, age, and amount of note(s) receivable.
Accounts Receivable
Do you have accounts receivable, including e-payment, factoring companies, and any bartering or online auction accounts?  
If yes, you may be asked to provide a list of name, age, and amount of the account(s) receivable.
If the business owns more properties, vehicles, or equipment than shown in this form, please list on a separate attachment.
Real Estate (Buildings, Lots, Commercial Property, etc.)



$



Current Market Value   Minus Loan Balance (mortgages, etc.)
$ X0.8 = $ - $ Total Value of Real Estate =



$



Current Market Value   Minus Loan Balance (mortgages, etc.)
$ X0.8 = $ - $ Total Value of Real Estate =
(3c) $
(3) $
Business Vehicles (cars, boats, motorcycles, trailers, etc.). If additional space is needed, list on an attachment.




$


$


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ Total value of vehicle (if the vehicle is leased, enter 0 as the total value) =
Vehicle Make & Model



$


$


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ Total value of vehicle (if the vehicle is leased, enter 0 as the total value) =
Vehicle Make & Model



$


$


Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ Total value of vehicle (if the vehicle is leased, enter 0 as the total value) =
(4d) $
(4) $
Other Business Equipment
[If you have more than one piece of equipment, please list on a separate attachment and put the total of all equipment in box (5b)]/td>

$
Current Market Value   Minus Loan Balance
$ X0.8 = $ - $ Total value of equipment (if leased or used in the production of income enter 0 as the total value) =
(5b) $
(5) $
Do not include amount on the lines with a letter beside the number. Round to the nearest dollar.
Do not enter a negative number. If any line item is a negative number, enter "0" on that line.
Box A
Available Equity in Assets
$
Section 3   Business Income Information
Enter the average gross monthly income of your business. To determine your gross monthly income use the most recent 6-12 months documentation of commissions, invoices, gross receipts from sales/services, etc.; most recent 6-12 months earnings statements, etc., from every other source of income (such as rental income, interest and dividends, or subsidies); or you may use the most recent 6-12 months Profit and Loss (P&L) to provide the information of income and expenses.
Note: If you provide a current profit and loss statement for the information below, enter the total gross monthly income in Box B below. Do not complete lines (6) - (10). Entire household income should also include income that is considered as not taxable and may not be included on your tax return.
(6) $
(7) $
(8) $
(9) $
(10) $
Round to the nearest dollar.
Do not enter a negative number. If any line item is a negative number, enter "0" on that line.
Box B
Total Business Income
$
Section 4   Business Expense Information
Enter the average gross monthly expenses for your business using your most recent 6-12 months statements, bills, receipts, or other documents showing monthly recurring expenses.
Note: If you provide a current profit and loss statement for the information below, enter the total monthly expenses in Box C below. Do not complete lines (11) - (20).
(11) $
(12) $
(13) $
(14) $
(15) $
(16) $
(17) $
(18) $
(19) $
(20) $
Round to the nearest dollar.
Do not enter a negative number. If any line item is a negative number, enter "0" on that line.
Box C
Total Business Expenses
$
Round to the nearest dollar.
Do not enter a negative number. If any line item is a negative number, enter "0" on that line.
Box D
Remaining Monthly Income
$
Section 5   Calculate Your Minimum Offer Amount
The next steps calculate your minimum offer amount. The amount of time you take to pay your offer in full will affect your minimum offer amount. Paying over a shorter period of time will result in a smaller minimum offer amount.
If you will pay your offer in 5 or fewer payments within 5 months or less, multiply "Remaining Monthly Income" (Box D) by 12 to get "Future Remaining Income." Do not enter a number less than zero.
Note: The multipliers below (12 and 24) and the calculated offer amount do not apply if IRS determines you have the ability to pay your tax debt in full within the legal period to collect.
Round to the nearest whole dollar.

$
X 12 =
$
If you will pay your offer in 6 to 24 months, multiply "Remaining Monthly Income" (Box D) by 24 to get "Future Remaining Income". Do not enter a number less than zero.

$
X 24 =
$
Determine your minimum offer amount by adding the total available assets from Box A to the amount in either Box E or Box F. Your offer amount must be more than zero.

$
+
$
=
$
You must offer an amount more than $0.
*You may exclude any equity in income producing assets shown in Section 2 of this form.
Section 6   Other Information
Additional information IRS needs to consider settlement of your tax debt. If this business is currently in a bankruptcy proceeding, the business is not eligible to apply for an offer.
Is the business currently in bankruptcy?
Has the business ever filed bankruptcy?

If yes, provide:

Does this business have other business affiliations (e.g., subsidiary or parent companies)?


Do any related parties (e.g., partners, officers, employees) owe money to the business?
Is the business currently, or in the past, a party to a lawsuit?


Are you or have you been party to any lawsuits involving the IRS/United States (including any suits regarding tax matters)?


In the past 10 years, has the business transferred any assets for less than their full value?


In the past 3 years have you transferred any real property (land, house, etc.)?


Has the business been located outside the U.S. for 6 months or longer in the past 10 years?
Do you have any assets or own any real property outside the U.S.?


Does the business have any funds being held in trust by a third party?
$
Does the business have any lines of credit?
$ $
Section 7   Signatures
Under penalties of perjury, I declare that I have examined this offer, including accompanying documents, and to the best of my knowledge it is true, correct, and complete.
Form 656
(Rev. March 2017)
Department of the Treasury — Internal Revenue Service
Offer in Compromise

Include the $186 application fee and initial payment (personal check, cashier's check, or money order) with your Form 656. You must also include the completed Form 433-A (OIC) and/or 433-B (OIC) and supporting documentation. You should fill out either Section 1 or Section 2, but not both, depending on the tax debt you are offering to compromise.
Section 1   Individual Information (Form 1040 filers)
If you are a 1040 filer, an individual with personal liability for Excise tax, individual responsible for Trust Fund Recovery Penalty, self-employed individual, individual personally responsible for partnership liabilities, and/or an individual who operates as a single member LLC or a disregarded entity taxed as a sole proprietorship you should fill out Section 1. You must also include all required documentation including the Form 433-A (OIC), the $186 application fee, and initial payment.






Is this a new address?
If yes, would you like us to update our records to this address?

-
Individual Tax Periods
If Your Offer is for Individual Tax Debt Only

” Make sure to sign and date the attachment.
Low-Income Certification (Individuals and Sole Proprietors Only)
Do you qualify for Low-Income Certification? You qualify if your gross monthly household income is less than or equal to the amount shown in the chart below based on your family size and where you live. If you qualify, you are not required to submit any payments during the consideration of your offer. If your business is other than a sole proprietor or disregarded single member LLC taxed as a sole proprietor and you owe employment taxes after January 1, 2009, you cannot qualify for the waiver. IRS will determine whether the household income (at the time of the offer submission or at the time the offer is processed, whichever is lower) and family size support the decision not to pay the application fee.
Size of family unit48 contiguous states and D.C.HawaiiAlaska
1$2513$2888$3138
2$3383$3890$4227
3$4254$4892$5317
4$5125$5894$6406
5$5996$6896$7496
6$6867$7898$8585
7$7738$8900$9675
8$8608$9902$10765
For each additional person, add$871$1002$1090
Section 2   Business Information (Form 1120, 1065, etc., filers)
If your business is a Corporation, Partnership, LLC, or LLP and you want to compromise those tax debts, you must complete this section. You must also include all required documentation including the Form 433-B (OIC), and a separate $186 application fee, and initial payment.






Business Tax Periods
If Your Offer is for Business Tax Debt Only
” Make sure to sign and date the attachment.
Section 3   Reason for Offer
Explanation of Circumstances (Add additional pages, if needed) – The IRS understands that there are unplanned events or special circumstances, such as serious illness, where paying the full amount or the minimum offer amount might impair your ability to provide for yourself and your family. If this is the case and you can provide documentation to prove your situation, then your offer may be accepted despite your financial profile. Describe your situation below and attach appropriate documents to this offer application.
Section 4   Payment Terms
Check one of the payment options below to indicate how long it will take you to pay your offer in full. You must offer more than $0.. The offer amount should be in whole dollars only.
Lump Sum Cash

Enclose a check for 20% of the offer amount (waived if you are an individual or sole proprietor and met the requirements for Low Income Certification) and fill in the amount(s) of your future payment(s).
Total Offer Amount-20% Initial Payment=Remaining Balance
$-$=$
You may pay the remaining balance in one payment after acceptance of the offer or up to five payments, but cannot exceed 5 months.
$ Month after acceptance
$ Months after acceptance
$ Months after acceptance
$ Months after acceptance
$ Months after acceptance
Periodic Payment

$
Note: The total amount must equal all of the proposed payments including the first and last payments.
Enclose a check for the first month's payment.
$ $ $ month.
Note: The total months may not exceed a total of 24 months, including the first payment. Your first payment is considered to be month 1; therefore, the remainder of the payments must be made within 23 months for a total of 24.
You must continue to make these monthly payments while the IRS is considering the offer (waived if you met the requirements for Low Income Certification). Failure to make regular monthly payments will cause your offer to be returned with no appeal rights.
Section 5   Designation of Payment, Electronic Federal Transfer Payment System (EFTPS), and Deposit
Designation of Payment
If you want your payment to be applied to a specific tax year and a specific tax debt, such as a Trust Fund Recovery Penalty, please tell us the tax year/quarter . If you do not designate a preference, we will apply any money you send to the government's best interest. If you want to designate any payments not included with this offer, you must designate a preference for each payment at the time the payment is made. However, you cannot designate the $186 application fee or any payment after the IRS accepts the offer.
Note: Payments submitted with your offer cannot be designated as estimated tax payments for a current or past tax year.
Electronic Federal Transfer Payment System (EFTPS)
Did you make your payment through the Electronic Federal Tax Payment System (EFTPS)?
$
Note: Any initial payments paid through the EFTPS system must be made the same date your offer is mailed.
Deposit
If you are paying more than the initial payment with your offer and you want any part of that payment treated as a deposit, check the box below and insert the amount.
$ $ $ be held as a deposit./td>
If your offer is rejected, returned, or withdrawn please check one of the boxes below and let us know what you would like us to do with your deposit.
)   )
CAUTION: Do NOT designate the amounts sent in with your offer to cover the initial payment and application fee as “deposits.” Doing so will result in the return of your offer with no right to appeal.
Section 6   Source of Funds, Making Your Payment, Filing Requirements, and Tax Payment Requirements
Source of Funds

Making Your Payment
Include separate checks for the payment and application fee.
Make checks payable to the “United States Treasury” and attach to the front of your Form 656, Offer in Compromise. All payments must be in U.S. dollars. Do not send cash. Send a separate application fee with each offer; do not combine it with any other tax payments, as this may delay processing of your offer. You may also make payments through the Electronic Federal Tax Payment System (EFTPS). Your offer will be returned to you if the application fee and the required payment are not included, or if your check is returned for insufficient funds.
Filing Requirements
Note: Do not include original tax returns with your offer. You must either electronically file your tax return or mail it to the appropriate IRS processing office before sending in your offer.
Tax Payment Requirements (check all that apply)

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