What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Bellingham WA is an agreement 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 arising under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It offers qualified taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the very best interest of both the taxpayer and the IRS. To be thought about, usually you must make a proper deal based on what the IRS considers your true capability to pay. It might be a legitimate alternative if you can’t pay your complete tax liability, or doing so creates a financial hardship.
A common myth or understanding thanks to advertisements 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 acquire a lower settlement of your tax debt, these advertisements provide an incorrect perception that the majority of deals are appropriate which a lot of deals will be accepted (even unsuitable deals).
The IRS considers your unique set of realities and situations. So it is necessary that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are secured which a suitable offer is made based on your:
Capability to pay;
The OIC application requires you to explain your financial situation in detail, so prior to you continue you must be willing to make a complete and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Bellingham Washington
Prior to the IRS will consider your offer, you must: (1) submit all tax returns you are legally required to submit, (2) make all required approximated tax payments for the existing year, and (3) make all required federal tax deposits for the existing quarter if you are an entrepreneur with workers. In addition, you are not qualified if you are in an open bankruptcy proceeding.
The OIC program is a choice for taxpayers who are unable to pay their tax amounts in a lump sum or through an installment contract and have actually tired their search for other payment arrangements. To get approved for the OIC program, taxpayers need to be able to demonstrate and show that their tax quantity can not be settled under either a swelling sum or installment contract for starters.
All other payment options should be thought about before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is right.
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 need to be higher than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the amount owed could be collected, but you have an economic hardship or other unique circumstances 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 gets the OIC.
Usually, the IRS will not accept an offer if you can pay your tax debt in full through an installment arrangement or a lump sum.
It is essential to keep in mind that penalties and interest will continue to accrue during the deal assessment process.
Contact the Tax Attorney Network in Bellingham WA Today at (855) 980-7563
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