Free Tax Guide
What Forms Are Needed for an IRS Offer in Compromise?
Key Takeaway
An IRS Offer in Compromise requires four primary forms: (1) Form 656 (or Form 656-L for Doubt as to Liability); (2) Form 433-A (OIC) for individuals or Form 433-B (OIC) for businesses; (3) Form 656-B as the instructions booklet; and (4) Form 656-PPV for periodic payment offers. Plus supporting documentation — bank statements, pay stubs, asset valuations, and medical or court-ordered expense records. The short version is that getting the forms right is half the work of OIC success. Missing forms or incomplete sections cause the offer to be returned without substantive review.1
Gathering forms for OIC? A 15-minute consultation is free.
OIC forms are prescriptive. Form 656 sets the offer terms. Form 433-A (OIC) or 433-B (OIC) provides the financial disclosure on which RCP is calculated. Supporting documentation substantiates every line. Errors in any form typically cause returned offers. This chapter walks through each required form and what supporting documentation accompanies it.
For OIC application process, see How to Apply for OIC.
The Four Core OIC Forms
ApplicationForm 656
FinancialForm 433 (OIC)
InstructionsForm 656-B
PaymentForm 656-PPV
| Form | Purpose | Required For2 |
|---|---|---|
| Form 656 | Offer application | All DATC / ETA / DATCSC offers |
| Form 656-L | Doubt as to Liability offer | DATL offers only |
| Form 433-A (OIC) / 433-B (OIC) | Financial disclosure | Individual / business |
| Form 656-B | Instruction booklet | Reference only; not filed |
| Form 656-PPV | Periodic payment voucher | Periodic payment offers |
Quick Reference
Jump to the form: Form 656, Form 433 (OIC), Form 656-B, or Form 656-PPV. For supporting documentation, see the OIC forms master reference. To scope form completion, a 15-minute consultation is free.
1. Form 656: The Offer Application
Form 656 is the main Offer in Compromise application, used for DATC, ETA, and DATCSC offers. It identifies the taxpayer, tax years, offer amount, and payment terms.
If this is you: Filing an OIC on Doubt as to Collectibility (the most common category). Form 656 is the primary application. Complete every section; missing information returns the offer.
Form 656 Strategy
- Section 1: Low-income certification. If eligible, complete for fee/deposit waiver.
- Section 2: Taxpayer information.
- Section 3: Tax periods. List all periods subject to the offer.
- Section 4: Offer type. Lump sum or periodic payment.
- Section 5: Offer amount. At or above RCP.
- Section 6: Deposit. 20% of offer amount.
- Section 7: Signature under penalty of perjury.
2. Form 433-A (OIC) or 433-B (OIC): Financial Disclosure
The Collection Information Statement for OIC purposes — individual (433-A OIC) or business (433-B OIC). Provides the asset, income, and expense data the IRS uses to calculate RCP.
If this is you: Completing the financial statement. Accuracy matters. Asset valuations at FMV (IRS applies 80% QSV). All income sources. All expenses within CFS limits. Supporting documentation attached.
3. Form 656-B: OIC Booklet
Form 656-B is the complete OIC instruction booklet. Not filed — used as reference while preparing the other forms.
If this is you: Preparing the OIC yourself. Form 656-B is your primary reference. It includes instructions, forms, worksheets, and the submission address.
4. Form 656-PPV: Periodic Payment Voucher
Form 656-PPV is used to make periodic payments under a periodic payment offer during the IRS review period.
If this is you: Filing a periodic payment OIC. Monthly payments continue during review using Form 656-PPV. Payments apply against the offer amount if accepted; retained by IRS if rejected.
OIC forms ready but unsure about supporting documentation? Supporting docs are as important as the forms. Book a consultation to verify completeness.
OIC Forms Master Reference
| Item | Purpose |
|---|---|
| Form 656 | OIC application (DATC / ETA / DATCSC) |
| Form 656-L | OIC application (DATL) |
| Form 656-B | OIC Booklet (instructions / reference) |
| Form 433-A (OIC) | Individual CIS for OIC |
| Form 433-B (OIC) | Business CIS for OIC |
| Form 656-PPV | Periodic Payment Voucher |
| Form 13711 | OIC Rejection Appeal |
| Form 4506-T | Transcript Request |
| Bank statements | Income and asset verification (3 months typical) |
| Pay stubs | Current income |
| Brokerage statements | Investment assets |
| Retirement account statements | Retirement assets with age discount |
| Home appraisal / Zillow | Real estate FMV |
| Vehicle valuation | NADA or Kelley Blue Book |
| Mortgage / loan statements | Encumbrances reducing NRE |
| Medical records | Necessary expense documentation |
| Court orders | Alimony, child support documentation |
Form Submission Deadlines
- No OIC filing deadline. Can be filed anytime CSED is open.
- Supporting documentation within 10 to 30 days of request. IRS may issue IDR.
- Form 656-PPV monthly during periodic payment review.
- Form 13711 appeal: 30 days from rejection.
OIC Form Submission Quality and Outcomes
| Form Submission Quality | Typical Outcome |
|---|---|
| Complete forms + full supporting documentation | Substantive review |
| Complete forms + missing documentation | IRS requests more; delayed review |
| Incomplete forms | Offer returned as not processable |
| Inflated or inaccurate data | Credibility damage; rejection |
OIC Forms Escalation Pathway
Submission Review
IRS checks completeness. Missing forms or sections cause return.
Substantive Review
IRS evaluates financial data against CFS and applies RCP analysis.
Decision
Acceptance, rejection, or counter-offer. IRS may request additional documentation.
The First 48 Hours Preparing OIC Forms
- Download current Form 656 and 656-B from IRS.gov.
- Identify individual or business (select 433-A OIC or 433-B OIC).
- Pull bank statements (3 months).
- Gather pay stubs, 1099s, K-1s.
- Value assets at FMV with supporting documentation.
- Complete forms in sequence — 433 first, then 656.
- Verify arithmetic and sign.
★
Brotman Law has been recognized by Inc. Magazine as one of California’s fastest-growing law firms. We prepare OIC forms with full supporting documentation for every submission. Our office is based in San Diego.
The ROI Question
Form quality drives OIC outcomes. Complete forms with supporting documentation produce faster review and higher acceptance rates than incomplete submissions.
Trying to Settle Your IRS Tax Debt?
The Offer in Compromise process is well-defined, but the calculation — particularly Reasonable Collection Potential — requires getting the financial disclosure right. An offer built on the correct number has a real chance. One built on an incomplete or inflated RCP gets rejected. If you’re considering an OIC, preparation matters as much as the filing.
Discuss My Offer in Compromise → Or call: (619) 378-3138
When to Engage an Attorney for OIC Forms
- Balance over $50,000.
- Complex assets. Business, real estate, retirement.
- Self-employment income.
- DATL offers.
- Prior rejected OIC.
Any of the above apply?
A 15-minute consultation is free. We prepare OIC forms and documentation.
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Frequently Asked Questions
What forms do I need for an IRS OIC?
Four core forms: Form 656 (application), Form 433-A (OIC) for individuals or 433-B (OIC) for businesses (financial disclosure), Form 656-B (instructions), and Form 656-PPV (periodic payment voucher if applicable). Plus supporting documentation (bank statements, pay stubs, asset valuations, expense records).
What is Form 656?
The Offer in Compromise application form. Used for Doubt as to Collectibility, Effective Tax Administration, and DATCSC offers. Identifies taxpayer, tax years, offer amount, and payment terms.
What is Form 656-L?
The Offer in Compromise application for Doubt as to Liability offers. Used when the underlying tax amount is disputed rather than ability-to-pay. No financial disclosure required. Replaces Form 656 for DATL offers.
What is Form 433-A (OIC)?
The Collection Information Statement for individual OIC. Provides asset, income, and expense data the IRS uses to calculate Reasonable Collection Potential. Extensive disclosure — bank accounts, real estate, vehicles, retirement, pension, investments, life insurance, and personal property.
What is Form 433-B (OIC)?
The Collection Information Statement for business OIC. Business assets, accounts receivable, equipment, inventory, and income / expense analysis. More complex than 433-A (OIC) because business entities require going-concern vs. liquidation analysis.
What is Form 656-B?
The OIC Booklet — instructions, forms, worksheets, and submission addresses. Not filed. Used as reference while preparing the other forms. Available at IRS.gov/pub/irs-pdf/f656b.pdf.
What is Form 656-PPV?
The Periodic Payment Voucher for periodic payment OICs. Used to make monthly payments during the IRS review period. Each payment applies against the offer amount if accepted or is retained if rejected.
What supporting documentation do I need?
Bank statements (3 months typical), pay stubs or profit/loss for self-employed, 1099s and K-1s, real estate valuations, vehicle valuations, retirement account statements, investment statements, mortgage and loan statements, medical documentation for above-standard expenses, court orders for alimony/child support.
How long does it take to complete OIC forms?
Self-prepared: 20 to 40 hours typical. Professional preparation: 10 to 20 hours of attorney / paralegal time. Complex cases (business, multi-entity) can take longer. Form completion is the most time-intensive part of the OIC process.
Can I file OIC forms online?
No. OIC forms must be filed by mail to the address in Form 656-B. Certified mail with return receipt is recommended. The IRS does not accept electronic OIC submissions.
What happens if my OIC forms are incomplete?
The offer is returned as not processable. The 20% deposit is typically kept and applied against the balance. The application fee ($205) is also retained. Correct the incomplete items and resubmit with a fresh deposit.
Do I sign OIC forms under penalty of perjury?
Yes. Form 656 and Form 433-A (OIC) / 433-B (OIC) are both signed under penalty of perjury. False information can support civil fraud or criminal charges. Accurate disclosure is a legal obligation, not a strategic choice.
Where do I send OIC forms?
The submission address is listed in Form 656-B. It varies by state. California residents typically submit to the Memphis, Tennessee OIC office. Certified mail with return receipt is recommended for proof of timely submission.
Next Steps in This Guide
If you need OIC form preparation, a 15-minute consultation is free.
- OIC forms: Form 656-B Booklet.
- Form usage drawn from Brotman Law practice.
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