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Form 656-LSP: 656-L (sp)
IRS Form 656-L (sp) is an Offer in Compromise for Doubt as to Liability form that allows taxpayers to propose a settlement with the IRS. It governs those who doubt their tax obligation, and it requires offering $1.00 or more.
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IRS Form 656-LSP - 656-L (sp)
IRS Form 656-L (sp) is an Offer in Compromise for Doubt as to Liability form that allows taxpayers to propose a settlement with the IRS. It governs those who doubt their tax obligation, and it requires offering $1.00 or more.
Risk Radar
Scan points- 1Failure to provide a written explanation of why the debt is incorrect will result in the offer being returned without consideration.
- 2Filing without providing a written statement explaining why the debt is incorrect.
- 3Offering an amount less than $1.00 on Form 656-L (sp).
- 4Not including supporting documentation/proof to back up the doubt claim.
- 5Submitting the form when not eligible based on answers to Questions 1–7.
Plain English
This form lets you formally offer the IRS a reduced amount of money to settle your tax debt because you believe the debt is wrong or that you cannot pay it all at once. By filing Form 656-L (sp), you are proposing a compromise settlement with the agency regarding your tax liability.
Submission Date
- Filing date: 2024-08-07 22:10:12
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when a genuine dispute exists about whether you owe tax or how much tax you owe (Doubt as to Liability - DATL).
- Do not use it when the tax debt is established by a final judicial decision or judgment based on current law.
- Check Publicación 4134 (sp) instead when seeking general information about Low Income Taxpayer Clinics.
Form selector
Use this form or another form?
Only need penalty reduction/waiver
Use links provided on page 5 to determine if this is appropriate.
✓ Check Form 843 (sp) instead when seeking penalty relief.
Not stated in the official source — verify on the agency site
Disagree with an adjustment based on unreported income, but believe you owe tax
Respond to Notice CP2000 first before filing 656-L.
✓ Check Form CP2000 (Notice) instead when disagreeing with a specific IRS adjustment.
Not stated in the official source — verify on the agency site
Have an issue that is currently being reviewed by another IRS office (e.g., audit reconsideration)
Do not file 656-L until that other issue is resolved to avoid rejection.
✓ Check for resolution status before filing Form 656-L (sp).
Not stated in the official source — verify on the agency site
Deadline or filing window
The filing trigger event is when a taxpayer wishes to make an Offer in Compromise due to doubt about their liability. There is no specific deadline date listed, but if you answer 'Yes' to Question 7, you must complete the form and offer $1.00 or more.
Checklist
What you need before filling it out
Genuine dispute over tax amount/existence
The taxpayer's belief regarding liability. · Form 656-L (sp) / Page 2
Must offer $1.00 or more
Must state an offer greater than or equal to $1.00. · Implied by context on page 2/Form Title
Prequalification status
The taxpayer's eligibility for the Offer in Compromise. · Form 656-L (sp) / Page 4
Response to Notice CP2000
Taxpayer is responding specifically to this notice. · Form 656-L (sp) / Page 5, Question 6
Tax obligation basis
The debt must be disputed; it cannot be based on a final judicial decision. · Form 656-L (sp) / Page 2
Before you submit
- 1Confirm the form revision date reads 05/24.
- 2Ensure you are offering a settlement amount of at least $1.00 or more.
- 3Verify that the debt is genuinely disputed (i.e., not settled by final court judgment).
- 4If applicable, confirm you have resolved all other outstanding issues with the IRS before filing.
- 5If responding to an issue, ensure you are addressing it via this form or referencing the correct notice number.
- 6Double-check that your offer is for a reduction/waiver only (if so, consider Form 843).
- 7Ensure all required sections on pages 1 through 6 are completed.
How to file this form
- 1Complete the necessary information fields on IRS Form 656-L (sp) using the current edition.
- 2Verify that your offer meets the minimum requirement of $1.00 or more, and ensure it is appropriate for your specific dispute situation.
- 3If you are responding to a notice, confirm you have addressed the issues outlined in that notice before submitting Form 656-L (sp).
- 4Sign and date IRS Form 656-L (sp) where indicated on the form.
- 5Mail or submit the completed Form 656-L (sp) to the appropriate IRS service center address (address not specified in the excerpt, but required for filing).
Known limitations
- 1The Form 656-L (sp) does not apply if the tax debt was established by a final judicial decision or judgment regarding the existence or amount of the debt.
- 2The Form 656-L (sp) is not used if the taxpayer agrees they owe the taxes but cannot pay the full amount; in that case, Form 656 should be completed instead.
- 3If the doubt stems from an adjustment made by the IRS based on unreported income and the taxpayer answers 'Yes' to question 7, they must respond to Notice CP2000 before using Form 656-L (sp).
- 4If a taxpayer only seeks reduction or forgiveness of a penalty, but not a dispute over the underlying debt, they should check specific links provided on page 5 instead of submitting this form.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition of IRS Form 656-L (sp) is Revision 5, dated May 2024. The source indicates that the form itself contains information regarding what to know and important details.
What changed or needs a fresh check
- Edition date — confirm Revision 5-2024
- Catalog Number — confirm 93906R
- IRS Contact Phone — confirm the toll-free number is 800-829-1040
- Required Minimum Offer — ensure you are offering $1.00 or more (implied by context, confirmed on page 2)
- Taxpayer Advocate Service Phone — confirm the dedicated line is 877-777-4778
Quick Facts
Downloads
After you file
- 1Keep a copy of the filed IRS Form 656-L (sp) for your records.
- 2If the taxpayer believes their tax debt is incorrect because the IRS prepared or filed their return, an amended return must be submitted following instructions (e.g., Form 1040-X).
- 3If the offer is solely for a spouse, follow the instructions in Form 8379 before filing this form.
- 4The taxpayer should refer to IRS.gov/espanol for instructions on completing Form 1040-X.
Sources
- SRCCatalog Number 93906R and Revision 5-2024 are listed on page 1.
- SRCThe official title is Form 656-L (sp), which means Offer in Compromise for Doubt as to Liability (DATL) [Instructions p.1].
- SRCIf the taxpayer has a genuine dispute over tax debt existence or amount, they must complete Form 656-L (sp) [Instructions p.2].
- SRCThe form is not applicable if the debt was established by a final judicial decision or based on current law [Instructions p.2].
- SRCIf agreeing to owe but cannot pay fully, the taxpayer should use Form 656 (sp) and reference Form 656-B (sp) [Instructions p.4].
- SRCIf the doubt is due to IRS filing the return, the taxpayer must file Form 656-L (sp) if they answer 'Yes' to question 3 [Instructions p.4].
- SRCIf only seeking penalty reduction and answering 'Yes' to question 5, specific links are provided for review [Instructions p.5].
- SRCThe form is applicable if the taxpayer disagrees with an adjustment based on unreported income and answers 'No' to question 7 (after reviewing CP2000) [Instructions p.5].
Common confusion points
What if I agree with my tax debt but can't pay it all?
The source states that an offer under DATC requires using Form 656 (sp) based on true ability to pay, not this form.
→ Complete Form 656 (sp) instead of the Form 656-L (sp).
When should I use Form 656-L (sp) if my debt is wrong because the IRS filed it for me?
If the answer to question 3 is 'Yes' (IRS filed the return), you must file this form.
What if my dispute is only about a penalty, not the tax itself?
If the answer to question 5 is 'Yes', check the provided links on page 5 before filing Form 656-L (sp).
Do I need to address SS-8 first if my debt issue relates to worker status?
If you are presenting a Form SS-8, use this form but consult the specific instructions for resolving your SS-8.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Notice CP2000 — The taxpayer must respond to this notice before filing Form 656-L (sp) if they disagree with an IRS adjustment.
Questions about IRS Form 656-LSP
What is IRS Form 656-LSP used for?
This form lets you formally offer the IRS a reduced amount of money to settle your tax debt because you believe the debt is wrong or that you cannot pay it all at once. By filing Form 656-L (sp), you are proposing a compromise settlement with the agency regarding your tax liability.
Who must file IRS Form 656-LSP?
Taxpayers who doubt their tax obligation must file IRS Form 656-L (sp). This applies to those unable to pay or facing extreme difficulty paying the full amount, or those disputing the accuracy of the debt.
What information does IRS Form 656-LSP require?
The form collects details about why the taxpayer doubts the liability and what they are offering. Specifically, it requires a written statement explaining the doubt and supporting documentation/proof that helps the IRS identify the reason for the dispute.
Where do I file IRS Form 656-LSP?
The form is presented for submission to the corresponding IRS Service Center as indicated in the instructions of the Form 1040(SP). The contact number provided by the IRS is 800-829-1040.
How do I complete IRS Form 656-LSP?
The filer must first determine eligibility by answering questions 1 through 7 on Form 656-L (sp). The form requires offering $1.00 or more based on what the taxpayer believes they owe. Finally, a written statement explaining the doubt and supporting documentation must accompany the submission.
What happens if IRS Form 656-LSP is filed incorrectly?
If a taxpayer does not provide a written statement explaining why the debt or part of the debt is incorrect, their offer will be returned without further consideration.
What if I agree with my tax debt but can't pay it all?
The source states that an offer under DATC requires using Form 656 (sp) based on true ability to pay, not this form. Complete Form 656 (sp) instead of the Form 656-L (sp).
When should I use Form 656-L (sp) if my debt is wrong because the IRS filed it for me?
If the answer to question 3 is 'Yes' (IRS filed the return), you must file this form.
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