How to Fill Out and Submit IRS Form 906: Parts, Signatures, and Filing

To fill out IRS Form 906, the Closing Agreement on Final Determination Covering Specific Matters, you work directly with the IRS examiner or appeals officer already handling your case: there is no standalone submission channel. Together you draft a five-part document that identifies the parties, recites the background, states exactly what is being agreed, closes with finality language, and carries signatures from both you and an authorized IRS official. Once countersigned, the agreement is final and can only be undone by showing fraud, malfeasance, or misrepresentation of a material fact.¹

Make Sure Form 906 Is the Right Form

Form 906 covers one or more specific matters, such as the cost basis of a property, the characterization of a payment, or the amount of a net operating loss carryover. If instead you and the IRS want to close out the total tax liability for an entire taxable period, the correct form is Form 866.² Form 906 is the tool when the item you are resolving will affect future years, such as an estate tax valuation that fixes an heir’s cost basis, or the depreciable basis of property, or the treatment of a loss carryover after a corporate reorganization.³

One boundary to know before you start: a closing agreement cannot determine the tax liability for a year that is already docketed before the U.S. Tax Court. That court holds jurisdiction over the liability determination for the period in front of it.⁴ Either form can be computer-generated using the pattern language of the official form rather than hand-filled on a printed copy.

How to Start the Request

Either you or the IRS can propose a closing agreement, but you don’t file it like a return. You raise it with the examiner or appeals officer assigned to your matter, and it moves forward inside that ongoing examination or appeals proceeding.⁴ Come prepared to show three things the IRS looks for: a genuine benefit to permanently closing the matter, good and sufficient reasons on your side for wanting the agreement, and that closing the matter will not disadvantage the government.⁵ Bring the underlying facts and supporting documentation for your position. The IRS officer will typically guide which form applies and help shape the language.

The Five Parts of Form 906

Whether you draft it yourself or the IRS officer prepares the draft, the finished document has the same five sections. Understanding each one makes the review go faster.

Identification of the parties. The opening names you (or your entity) and the Commissioner of Internal Revenue as the two parties entering the agreement under Section 7121. You’ll supply your legal name, current mailing address, and Taxpayer Identification Number or Social Security Number.⁶
WHEREAS clauses. Background paragraphs describing what tax year is involved, what issue arose, what positions each side took, and why you are resolving it through a closing agreement. These clauses are informative, not binding.
Determination clauses. The binding heart of the form, following the caption “NOW IT IS HEREBY DETERMINED AND AGREED for Federal tax purposes that…” and spelling out exactly what is agreed.⁴
Ending clause. Boilerplate stating the agreement is final and conclusive, subject only to the fraud, malfeasance, or misrepresentation exceptions and to any law enacted after the agreement date that applies to periods covered.⁵
Signatures. Signature lines for you and the authorized IRS official.

The WHEREAS section explains. The determination section binds. Keep them clearly separated; do not let recital language or argument bleed into the determinations.

Writing the Determination Clauses

This is where most drafting problems show up. Each agreed matter gets its own numbered determination clause, and every clause should read as a continuation of the sentence “NOW IT IS HEREBY DETERMINED AND AGREED for Federal tax purposes that…” That means the clauses are declarative statements of fact, not promises about future behavior.⁴ Do not write “Taxpayer will report the $50,000 gain as ordinary income.” Write instead “Gain of $50,000 on the above-described transaction is includible in taxpayer’s gross income as ordinary income for the taxable year ended December 31, 2025.”

A few practical rules the IRS applies when reviewing determination language:

Use dollar amounts, not formulas or percentages. State “$325,000,” not “the original purchase price plus documented improvements.”
State dates explicitly. A determination about a net operating loss carryover should identify the year the loss was sustained and the amount being carried forward from that year.
Spell out effects on future years. If the agreement fixes how an item will be treated on returns you haven’t filed yet, the determination clause must say so precisely.
Exclude extraneous material. Contentions, reasoning, and background belong in the WHEREAS clauses or the transmittal memorandum, not in the binding portion.

Attachments and Exhibits

Supporting documents such as appraisals, spreadsheets calculating adjusted basis, or financial schedules can be attached as exhibits. Every exhibit must be identified in the body of the agreement, and each page of every attachment must be initialed by both you and the IRS official signing for the Commissioner.⁴ Missing initials on a page can create an argument later about whether that page was part of the binding agreement.

Keep the underlying records (bank statements, purchase contracts, depreciation schedules) accessible during review. They do not get attached, but questions about the exhibit figures come up.

Signatures and Copies

Prepare three original copies for a single taxpayer or a joint return. After the IRS countersigns, two copies go back to you or your representative and one stays in the IRS file. If more parties are involved, add two extra copies for each additional party, one for that party and one for the IRS to attach to that party’s return.⁴

Joint Returns

When the agreement relates to a year for which you filed a joint return, both spouses generally must sign. One spouse may sign as agent for the other only with a power of attorney or other document specifically authorizing that agent to act in that capacity, and a photocopy or authenticated copy of that authorization must be submitted.⁵ If the specific matter pertains only to one spouse’s tax affairs, both signatures may not be necessary.

Corporations and Other Entities

A corporate officer signs by listing the corporation’s name followed by their own signature and title. Under Internal Revenue Code Section 6062, an officer’s signature on a document made for a corporation is treated as sufficient evidence of authority, and the IRS will not independently investigate your charter or bylaws.⁴ If the IRS officer learns the signer actually lacks authority, they will flag it for correction. A corporate seal is not required.

Large Groups of Taxpayers

When many taxpayers are parties to the same agreement, getting every signature on every copy can be impractical. Two workarounds exist: the parties can grant power of attorney to one person to sign for everyone, or each party can separately sign three copies with a statement noting the agreement is “being executed in multiple counterparts for ease of execution.” For groups of 25 or fewer related taxpayers, the IRS negotiates individual closing agreements with each person. For groups larger than 25 with identical issues, the IRS may enter a single “mass closing agreement” with an authorized representative of the class.⁵

Submitting the Signed Agreement

Deliver your signed copies directly to the examiner or appeals officer handling your case, not to a general processing center. Ideally the IRS reviews a draft before you sign to catch substance problems early. After signing, a second review checks formatting, layout, and proper execution, documented on a Closing Agreement Checklist (Form 4222).⁴

The Commissioner’s authority to sign has been delegated to field-level officials under Delegation Order 8-3, so the countersignature comes from a designated official in the Appeals or Compliance office working your case rather than from Washington.⁴ The internal guidance does not specify a standard processing timeline, and turnaround depends on complexity and workload. Once the official countersigns, you receive your executed copies, and the IRS attaches the original to your most recent return covering a year the agreement pertains to.

What Happens After Signing

A fully executed closing agreement is close to permanent. No IRS officer, employee, or agent can reopen the agreed matters or modify the agreement, and in any lawsuit or proceeding it cannot be set aside or disregarded.¹ Any tax or deficiency determined under the agreement is assessed and collected accordingly, and any overpayment is credited or refunded.³

There are only three narrow exits. The IRS can attempt to set the agreement aside for fraud, malfeasance, or misrepresentation of a material fact; if the IRS concludes one applies, it sends a preliminary letter (Letter 1707-P) by certified mail giving you 30 days to protest before any action is taken.⁴ The agreement is also subject to any Code section that expressly overrides other law (except Section 7122, the compromise statute), and if it covers future taxable periods, to any law enacted after the agreement date.

Store your countersigned original with the supporting documents used during negotiations. If the agreed issue touches future returns, such as a fixed cost basis, you will reference the agreement every time you file until the asset is disposed of or the relevant period closes.

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Office of the Law Revision Counsel. 26 USC 7121 Closing Agreements
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Internal Revenue Service. Closing Agreements
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eCFR. 26 CFR 301.7121-1 – Closing Agreements
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Internal Revenue Service. Processing Closing Agreements in Appeals
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Internal Revenue Service. Closing Agreements
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Internal Revenue Service. Processing Closing Agreements in Appeals – Section: 8.13.1.3.4.1 Identification of Parties