656-B

Form 656 Booklet Offer in Compromise

Agency
IRS
Revision
Rev. 4-2026
Fillable fields
842
Pages
32
Official source
IRS form page
Checked
October 21, 2026
Fill 656-B online
Page 1 of form 656-B

Form 656-B: Form 656 Booklet, Offer in Compromise

Form 656-B is the Form 656 Booklet for an offer in compromise. The booklet describes an offer as an agreement between the taxpayer and the IRS that settles a tax debt for less than the full amount owed. It holds the instructions plus three removable forms: Form 433-A (OIC) for wage earners and self-employed individuals, Form 433-B (OIC) for businesses, and Form 656, and it ends with an application checklist.

The booklet suggests checking eligibility first with the Individual Online Account (IOLA) at IRS.gov/OLA or the OIC Pre-Qualifier tool at IRS.gov/OICtool, and says that submitting an application does not ensure the IRS will accept the offer. An offer based on a legitimate doubt that the tax is owed uses Form 656-L instead.

You can fill out the PDF free in your browser on this page and download the result without an account.

What's in Form 656-B

What you need to know

Pages 1 to 3: what an offer is, the conditions before an offer is considered, bankruptcy and open audits, tax refunds, doubt as to liability, tax liens, trust fund taxes and other facts.

Paying for your offer and how to apply

The $205 application fee, the Lump Sum and Periodic Payment options, what the application includes, and applying online through the Individual Online Account.

Form 433-A (OIC)

Ten sections on household, employment, personal and business assets, self-employment, monthly income and expenses, the minimum offer calculation, other information and signatures.

Form 433-B (OIC)

Seven sections on business information, business assets, income, expenses, the minimum offer calculation, other information and signatures.

Form 656

Nine sections: individual or business information, reason for offer, payment terms, designation of payment, source of funds and compliance, offer terms, signatures and paid preparer.

Application Checklist

Page 29: a checklist to include with the application, and the mailing addresses by state.

How to complete the application package

  1. 1

    Gather your information

    Tax returns, bank statements, income statements such as Form W-2 and Form 1099, mortgage, credit and retirement account statements, and the household's monthly gross income and expenses.

  2. 2

    Form 433-A (OIC) or 433-B (OIC)

    Individuals and sole proprietors use Form 433-A (OIC); corporations, partnerships and LLCs use Form 433-B (OIC). Each has a section that calculates the minimum offer amount.

  3. 3

    Attach documentation

    Attach copies of the documents listed at the end of each form. The booklet says not to send original documents.

  4. 4

    Fill out Form 656

    It names the tax years and types of tax, the offer amount and the payment terms. The booklet says the offer amount is to be equal to or greater than the amount calculated on Form 433-A (OIC) or 433-B (OIC).

  5. 5

    Include the fee and initial payment

    Pay through EFTPS or the Individual Online Account, or by a separate check, cashier's check or money order for each fee and payment, payable to the "United States Treasury". Low-Income Certification applicants send no money.

  6. 6

    Send the package

    Apply online through the Individual Online Account, or mail the package to the Centralized Offer in Compromise Unit in Memphis or Brookhaven based on your state, and keep a copy.

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Where to send it, fee and what comes next

Memphis

AL, AZ, CA, CO, GA, HI, ID, KY, LA, MD, MS, ND, NM, NV, OK, OR, SD, TN, TX, UT, VA, WA: Memphis IRS Center COIC Unit, P.O. Box 30803, AMC, Memphis, TN 38130-0803, 844-398-5025.

Brookhaven

AK, AR, CT, DC, DE, FL, IA, IL, IN, KS, MA, ME, MI, MN, MO, MT, NC, NE, NH, NJ, NY, OH, PA, PR, RI, SC, VT, WI, WV, WY, or a foreign address: Brookhaven IRS Center COIC Unit, P.O. Box 9007, Holtsville, NY 11742-9007, 844-805-4980.

Online

Individuals may apply through their Individual Online Account. The booklet says not to mail a duplicate application if it was already submitted online.

Fee

Each Form 656 carries the $205 application fee and initial payment, unless an individual meets the Low-Income Certification guidelines.

After you send it

The booklet says to reply promptly to IRS requests for more information, since a late reply leads to the offer being returned without appeal rights. Penalties and interest keep accruing while the offer is considered.

Five years after acceptance

The booklet says an accepted offer may be defaulted if required returns are not filed and taxes not paid on time within the five years after acceptance.

Related forms

Who uses Form 656-B?

  • Individuals and sole proprietors

    The warning on Form 656 says individuals requesting an offer use Form 656-B. Form 433-A (OIC) covers wage earners, sole proprietors and those submitting an offer for the estate of a deceased individual.

  • Businesses

    A corporation, partnership or LLC fills out Form 433-B (OIC). The booklet says an individual's share of a partnership debt cannot be compromised, and the partnership submits its own offer.

  • Spouses

    Spouses with joint debts who also have separate debts each send a separate Form 656. The booklet says legally separated or divorced spouses are not eligible to submit a joint offer.

  • Low-income individuals

    The booklet says individuals who meet the Low-Income Certification guidelines send no application fee or offer payments with the application or while it is considered.

  • Not during bankruptcy

    The booklet says a taxpayer or business in an open bankruptcy proceeding is not eligible to apply for an offer, and that open audits and innocent spouse claims are resolved first.

The taxpayer asking the IRS to settle a tax debt completes the forms in the booklet and sends them to the IRS.

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Questions about Form 656-B

What is in Form 656-B?

The instructions for an offer in compromise, removable copies of Form 433-A (OIC), Form 433-B (OIC) and Form 656, and an application checklist with the mailing addresses.

What does the booklet list before an offer is considered?

All required tax returns filed, a bill received for at least one tax debt in the offer, the current year's required estimated tax payments made, and, for business owners with employees, required federal tax deposits for the current quarter and the two preceding quarters.

How much does it cost to apply?

The booklet lists a $205 application fee plus an initial payment based on the payment option chosen. Both are waived for individuals who meet the Low-Income Certification guidelines.

What happens to a tax refund?

The booklet says the IRS may keep any tax refund, including interest, for a tax return assessed before the date it accepts the offer, by offsetting it against the tax debt. The refund does not count as a payment toward the offer.

What if I doubt that I owe the tax?

The booklet points to Form 656-L, Offer in Compromise (Doubt as to Liability), and says not to submit both types of offer at the same time.

Where do I mail the package?

To the Centralized Offer in Compromise Unit in Memphis or Brookhaven, depending on your state, as listed on page 29, unless it was submitted online through the Individual Online Account.