NY Form 656 2024-2025

NY Form 656: What You Should Know

What Is the Offer Amount? The IRS uses Offer in Compromise to assess and collect tax debt. The IRS considers the offer in compromise in the same way it does when it requires a lump sum payment. The balance of the debt, at the date the offer is made, is the amount required to balance the tax debt (or the offer's face amount if no balance is required). The IRS must determine the offer amount at the time the tax debt is posted. The offer amount might not be available at the time the tax debt is posted, so the IRS may request that you provide the offer amount before posting the tax debt. The IRS may also consider the offer amount when determining the final amount of payment that must be made. How to Get More Information. Filing the Offer in Compromise Tax Form 656 Tax Form 656, Offer In Compromise, is part of the process for making and finalizing the payment of taxable income taxes that remains after a payment reduction agreement is made and approved by the IRS. There are 3 steps to the process. Step 1 — Enter Taxable Income: The IRS will provide you with a Form 656 that will show taxable income on which a payment reduction agreement may be entered. You must enter the taxable income. For purposes of this process, an election can be made if the Form 656 is not an offer in compromise. When an election has been made, the IRS will not send you a Form 656 to complete the entry of taxable income. Instead, you must enter your election online. You can do, so after you fill in the “Payment Amount” section for the Offer in Compromise Tax Form 6156. Step 2 — Enter the Taxable Income: Enter the information on the Taxable Income Tax Form 656 to determine the amount of the offer in compromise. Step 3 — Enter the Amount of Tax Reduction: Complete the amount of the offer in compromise on the Taxable Income Tax Form 656 (Form 656) and write it down on a separate page. Required Information. The information required on the Offer In Compromise Tax Form 656 is for your records only. If you want to determine the amount that you are responsible for, you do not need to complete Form 656. It's sufficient for the IRS and other parties in a tax dispute to see that you entered taxable income. You can obtain your copy of the Tax Form 656 for free from the Internal Revenue Service.

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