What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Bedford TX is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, including any interest, penalties, or additional quantities emerging under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the total you owe. It provides eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The supreme objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, usually you must make an appropriate deal based on what the IRS considers your real ability to pay. It might be a genuine alternative if you can’t pay your complete tax liability, or doing so produces a financial hardship.
A common misconception or perception thanks to ads is the impression that taxpayers can quickly settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can certainly get a lower settlement of your tax debt, these ads offer an inaccurate perception that most offers are proper and that the majority of deals will be accepted (even inappropriate deals).
The IRS considers your distinct set of facts and scenarios. So it is essential that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are safeguarded which a suitable deal is made based upon your:
Capability to pay;
The OIC application needs you to explain your monetary situation in information, so prior to you proceed you should be willing to make a complete and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Bedford Texas
Before the IRS will consider your deal, you must: (1) file all tax returns you are legally needed to file, (2) make all needed estimated tax payments for the present year, and (3) make all required federal tax deposits for the current quarter if you are an entrepreneur with employees. In addition, you are not eligible if you are in an open insolvency proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a lump amount or through an installation arrangement and have exhausted their search for other payment arrangements. To get approved for the OIC program, taxpayers must have the ability to show and prove that their tax amount can not be settled under either a swelling amount or installation contract for beginners.
All other payment choices need to be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully jeopardize a tax liability for among the following factors:
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 total quantity you owe must be higher than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is appropriate and no doubt that the quantity owed might be collected, but you have a financial difficulty or other special situations which may permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments within 5 or less months from notification 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 an offer if you can pay your tax debt in full through an installment contract or a swelling sum.
It is important to note that penalties and interest will continue to accumulate throughout the offer examination procedure.