If you owe the Internal Revenue Service (IRS) money, it can be a stressful situation. To help alleviate some of that stress, you may be considering entering into an IRS settlement agreement. An IRS settlement agreement is a formal arrangement between you and the IRS to pay a reduced amount of tax debt. But before you can enter into such an agreement, you must first complete the IRS settlement agreement form.

The IRS settlement agreement form, formally known as Form 656, is the official document you need to submit to the IRS to request a settlement agreement. This form is used for both individual taxpayers and businesses who cannot pay their tax liability in full. It is important to note that not everyone is eligible for an IRS settlement agreement. The IRS carefully evaluates each applicant`s financial situation before accepting or rejecting a settlement proposal.

When filling out the IRS settlement agreement form, you must provide the IRS with detailed information about your financial situation. This information includes your income, expenses, assets, liabilities, and any other relevant financial information. The IRS will use this information to determine your ability to pay and whether you qualify for a settlement agreement.

Additionally, you will need to propose a settlement amount that you can realistically pay. This amount must be greater than or equal to the net realizable value of the assets the IRS could seize to collect your debt. You can use the IRS`s Offer in Compromise pre-qualifier tool to get an idea of what your settlement amount might be.

Once you have completed the IRS settlement agreement form and submitted it to the IRS, you will need to wait for their response. The IRS will carefully review your financial information and settlement proposal before making a decision. If your proposal is accepted, you will need to stick to the terms of the settlement agreement to avoid further action by the IRS.

In conclusion, the IRS settlement agreement form is a crucial step in the process of obtaining an IRS settlement agreement. It is important to understand the eligibility requirements and provide accurate financial information when filling out this form. While the process can be daunting, seeking professional advice and guidance can help ensure a successful outcome.