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Official form guide
Form 656L: Offer in Compromise Doubt as to Liability (DATL)
IRS Form 656L is Offer in Compromise Doubt as to Liability (DATL), used by taxpayers who believe their tax debt is incorrect. The form requires supporting documentation and must be signed.
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IRS Form 656L - Offer in Compromise Doubt as to Liability (DATL)
IRS Form 656L is Offer in Compromise Doubt as to Liability (DATL), used by taxpayers who believe their tax debt is incorrect. The form requires supporting documentation and must be signed.
Risk Radar
Scan points- 1Do not file if your debt dispute stems from an audit; instead, submit a request for audit reconsideration.
- 2Filing without providing supporting documentation or evidence to identify the doubt reason(s).
- 3Submitting when the debt is incorrect due to an audit; instead, request reconsideration.
- 4Failing to sign the Form 656-L as the Taxpayer/Corporation name before sending.
- 5Not listing all quarterly periods in Section 6 if claiming a Trust Fund Recovery Penalty.
Plain English
This form allows a taxpayer to tell the IRS that they disagree with how much tax they owe or why the debt was calculated. By filing Form 656-L, the taxpayer offers a compromise amount instead of paying the full assessed debt. Supporting evidence must accompany this document to help the IRS review the claim.
Submission Date
- Filing date: 2024-05-13 22:10:18
- 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 taxpayer believes their tax debt is incorrect due to items not reported correctly on the original return (e.g., Form 1040) or because an audit was performed, and they wish to file an Offer in Compromise.
- Do not use this form when you cannot afford to pay the amount owed but agree with the tax debt; instead, use Form 656-B, Doubt as to Collectibility (DATC).
- Check Form 656-B instead when you cannot afford to pay in full and agree with the tax debt.
Form selector
Use this form or another form?
Cannot afford payment but believe debt is correct
This form addresses affordability issues while agreeing with liability.
✓ Check Page 4 of Form 656L first.
Form 656-B, Doubt as to Collectibility (DATC)
Believe tax debt is incorrect due to audit findings
Use this path if the issue stems from an IRS audit, rather than simple reporting errors.
✓ See Publication 3598 guidance.
Submit a request for audit reconsideration
Wish only to reduce or forgive penalties
If liability itself is not in doubt, but penalties are, this form may be used for that purpose alone.
✓ Review Page 4 pre-qualifier questions.
Consider penalty abatement option
Deadline or filing window
The filing trigger is a belief that the tax debt is incorrect. There is no specific deadline mentioned in the excerpts, but all necessary supporting documentation must be provided to accompany the Form 656-L submission.
Checklist
What you need before filling it out
Supporting Documentation
Evidence supporting the reason(s) of doubt in accuracy · Generally attached to Form 656-L
Offer Amount (Section 7)
The specific dollar amount being offered as payment for outstanding tax debt · Section 7 of Form 656L
Tax Debt Basis
The total outstanding tax debt to which the offer applies (including interest/penalties) · Statement within Section 7
Filer Identification
Name, SSN, EIN and/or ITIN · All supporting documentation sheets
Taxpayer Attestation
Signature of Taxpayer/Corporation name & Date · Section 6
Before you submit
- 1The offer amount listed on Form 656L is $1 or more.
- 2Supporting documentation and an explanation for doubt are included with the submission.
- 3All fields on the Form 656-L have been completed.
- 4The taxpayer has signed Section 6 (Taxpayer Attestation).
- 5If applicable, the Spouse/Authorized Corporate Officer has also signed Section 6.
- 6If prepared by someone else, Section 7 includes that person's name and address.
- 7All additional supporting documentation sheets include the filer’s Name, SSN, EIN, and/or ITIN.
How to file this form
- 1Complete all fields on IRS Form 656-L (Rev. 5-2024), ensuring you make an offer amount of $1 or more.
- 2Attach supporting documentation that explains the reason(s) for doubting the tax debt's accuracy, especially if records cannot be reconstructed.
- 3Sign and date Section 6 of Form 656L (and have a spouse/officer sign if required), affirming the offer is true under penalties of perjury.
- 4Review the Application Checklist on Page 9 to confirm all necessary items are included before mailing.
Known limitations
- 1DATL cannot be considered if the tax debt has been established by a final court decision or judgment concerning existence or amount (Instructions p.2).
- 2If the assessed tax debt is based on current law, DATL cannot be disputed or considered (Instructions p.2).
- 3A taxpayer who receives an adverse determination without appealing may file a DATL offer (Instructions p.3).
- 4If a taxpayer agrees with the tax debt but cannot afford to pay in full (DATC), they must use Form 656, not Form 656-L (Instructions p.3).
- 5A taxpayer cannot submit an offer based on DATL (Form 656-L) and a separate offer based on DATC (Form 656) simultaneously (Instructions p.3).
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 656L is Revision 5-2024, and it was last revised in May 2024.
What changed or needs a fresh check
- Edition date — confirm the revision date reads 5-2024.
- Offer amount — confirm the offer is $1 or more and based on believed correct tax amount.
- Payment/Fee — confirm no deposit or application fee is required for a DATL offer.
- Signature — confirm both Taxpayer/Corporation signature (if applicable) and Date are included.
Quick Facts
Downloads
After you file
- 1The submission begins a process of evaluation and verification by the IRS (Instructions p.2).
- 2The offer must be for $1.00 or more, and it should be based on what the taxpayer believes they owe (Form p.5).
- 3A written statement explaining why the tax debt or portion of the debt is incorrect must accompany the filing (Form p.5).
- 4Taxpayers can call 1-800-829-1040 if they have questions regarding qualifications for an offer in compromise (Instructions p.1).
Sources
- SRCCatalog Number 47516R and Form 656-L are listed on page 1 (Instructions p.1).
- SRCThe official revision date for the form is Rev. 5-2024 (Instructions p.1).
- SRCA DATL exists where there is a genuine dispute as to existence or amount of tax debt under the law (Instructions p.2).
- SRCIf you receive an adverse determination and did not appeal, you may file this DATL offer (Instructions p.3).
- SRCThe form requires an offer for $1.00 or more based on what the taxpayer believes they owe (Form p.5).
- SRCTaxpayers can call 1-800-TAX-FORM (1-800-829-3676) to get forms and publications (Instructions p.1).
Common confusion points
What is a DATL offer?
It exists when there is a genuine dispute as to the existence or amount of the correct tax debt under the law (Instructions p.2)
→ If you believe you owe part or all of your tax debt, this form applies.
When should I use Form 656-L instead of Form 656?
Use 656-L when there is a dispute over *if* or *how much* you owe (DATL); use Form 656 when you agree you owe it but cannot pay in full (DATC) (Instructions p.3)
→ Check the specific reason for your offer.
What if an audit was performed on my return?
If you believe the debt is incorrect due to an audit, do NOT file Form 656-L; submit a request for audit reconsideration instead (Form p.4).
Do I need to file Form 656-L if I only disagree with a penalty?
No, if you believe you should be entitled to a reduction or forgiveness of a penalty only, do NOT file this form (Instructions p.4).
What if the debt discrepancy is between my tax forms and W-2/W-3 data?
If there is a discrepancy between Forms 941, 943, 944, 945, 1040 or 1040 Schedule H and the SSA data on Form W-2, W-3, do NOT file this form (Instructions p.4).
What if I don't have a tax debt?
You are not eligible for an offer until you receive a balance due notice (Form p.5).
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- CP2000 notice - If you disagree with an IRS adjustment based on unreported income, respond to the CP2000 notice instead of filing Form 656-L (Instructions p.4).
Questions about IRS Form 656L
What is IRS Form 656L used for?
This form allows a taxpayer to tell the IRS that they disagree with how much tax they owe or why the debt was calculated. By filing Form 656-L, the taxpayer offers a compromise amount instead of paying the full assessed debt. Supporting evidence must accompany this document to help the IRS review the claim.
Who must file IRS Form 656L?
Taxpayers file IRS Form 656L Doubt as to Liability (DATL). This includes individuals and businesses who believe their tax debt is incorrect for various reasons.
What information does IRS Form 656L require?
The form collects information such as the business name, EIN, physical/mailing addresses, and specific details like Trust Fund Recovery Penalty periods or Corporate Income Tax Return years. Section 7 allows recording if another person prepared the application.
Where do I file IRS Form 656L?
The source does not specify a single service center address for submission. The IRS may contact you by telephone about this offer.
How do I complete IRS Form 656L?
First, complete Section 2 with business details (if applicable) and list relevant tax periods. Next, fill out Sections 1, 3, 4, or 5 based on why the debt is doubted. Finally, ensure you sign the Form 656-L as the Taxpayer/Corporation name and include the required date.
What happens if IRS Form 656L is filed incorrectly?
Providing false or fraudulent information on Form 656L may subject the taxpayer to criminal prosecution and penalties. Failure to provide all requested information may prevent the IRS from processing the request.
What is a DATL offer?
It exists when there is a genuine dispute as to the existence or amount of the correct tax debt under the law (Instructions p.2) If you believe you owe part or all of your tax debt, this form applies.
When should I use Form 656-L instead of Form 656?
Use 656-L when there is a dispute over *if* or *how much* you owe (DATL); use Form 656 when you agree you owe it but cannot pay in full (DATC) (Instructions p.3) Check the specific reason for your offer.
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