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IRS Form 656-L: Offer in Compromise (Doubt as to Liability)

By the Tax Relief Answers editors · Sources checked November 3, 2026 · How we check

The short answer

Form 656-L is the offer in compromise for doubt as to liability (DATL): you use it when there is a genuine dispute about whether you owe a tax debt, or how much. The form and its instructions say there is no application fee or payment for this offer, and that you must include a written explanation and supporting documents. The current revision is July 2026 (checked November 2026 on the irs.gov forms list). If you agree you owe the tax but cannot pay, the instructions say not to file Form 656-L.

Form 656-L at a glance

Who files it

Someone who believes all or part of an assessed tax is wrong and has not been able to fix it through the normal routes. The instructions give examples: an examiner misread the law, an examiner did not consider the evidence, or new evidence is available. One example is a taxpayer who missed an audit because of a move or a disaster and later learned of a tax lien.

The instructions also list when a DATL offer cannot be used:

• the liability was set by a final court decision or judgment;
• you are in an open bankruptcy;
• you owe restitution to the Department of Justice;
• you already have an accepted offer for the same year and liability;
• the IRS is still handling the issue another way, such as audit reconsideration, or you are answering a notice on the same issue.

What the IRS asks you to include

A written statement explaining why all or part of the tax is incorrect, and documents that support it. The offer amount should be the tax you believe is correct. The instructions say an offer sent without the explanation and documents will be returned without consideration. We do not give line-by-line instructions; the form includes a DATL pre-qualifier section that walks through the questions.

Where and how it is submitted

The form says to mail the package to the Brookhaven Internal Revenue Service DATL Unit, at the address on its last page. Do not include payments: any money sent is applied to the tax and not returned. Keep a copy and proof of mailing.

Form 656-L or Form 656?

The Form 656-B booklet says not to submit both at the same time; resolve the liability question first.

Steps

1. Check whether a regular route is still open, such as answering the notice, an appeal or audit reconsideration.
2. Download the current Form 656-L from irs.gov.
3. Work through the DATL pre-qualifier section in the form.
4. Write the explanation and gather the supporting documents.
5. Mail the form, with no payment, to the address printed on it.

Common mistakes

• Using Form 656-L because the bill is too high to pay. That is an ability-to-pay offer on Form 656.
• Sending a check. The form says no deposit or fee is required, and payments are not returned.
• Sending the offer without documents. The IRS returns it.

Related pages: appealing IRS collection, the CP2000 notice for proposed changes you can still answer, and our offer in compromise page.

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