What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Allen TX is an arrangement in between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This applies to all taxes, including any interest, penalties, or additional quantities occurring under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the total you owe. It supplies qualified taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be thought about, generally you need to make an appropriate offer based on what the IRS considers your true ability to pay. It might be a genuine choice if you can’t pay your complete tax liability, or doing so produces a monetary challenge.
A common misconception or perception thanks to ads is the impression that taxpayers can easily settle their tax liability “for pennies on the dollar” through the offer in compromise program. While you can certainly get a lower settlement of your tax debt, these ads provide an incorrect perception that many deals are appropriate and that most offers will be accepted (even inappropriate offers).
The IRS considers your distinct set of realities and scenarios. So it is very important that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are secured and that an appropriate deal is made based upon your:
Ability to pay;
The OIC application requires you to explain your monetary scenario in information, so before you continue you should be willing to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Allen Texas
Prior to the IRS will consider your deal, you should: (1) file all tax returns you are lawfully required to submit, (2) make all required estimated tax payments for the current year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with staff members. In addition, you are not qualified if you remain in an open personal bankruptcy proceeding.
The OIC program is a choice for taxpayers who are unable to pay their tax quantities in a lump amount or through an installation agreement and have tired their look for other payment plans. To qualify for the OIC program, taxpayers should have the ability to demonstrate and prove that their tax amount can not be settled under either a swelling sum or installment arrangement for starters.
All other payment choices need to be thought about prior to sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether or not the assessed tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the overall amount you owe must be higher than the amount of your possessions and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is appropriate and no doubt that the amount owed could be gathered, however you have an economic difficulty or other special situations which may enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or fewer months from notice of acceptance.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Typically, the IRS will not accept a deal if you can pay your tax debt in full through an installation contract or a swelling amount.
It is essential to keep in mind that penalties and interest will continue to accumulate during the offer assessment procedure.