What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Bethlehem PA is an agreement in between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This uses to all taxes, consisting of any interest, penalties, or additional quantities emerging under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the total you owe. It provides qualified taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the very best interest of both the taxpayer and the IRS. To be thought about, generally you need to make a proper deal based upon what the IRS considers your real capability to pay. It may be a legitimate alternative if you can’t pay your complete tax liability, or doing so creates a financial challenge.
A common misconception or understanding thanks to ads is the impression that taxpayers can easily settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can definitely obtain a lower settlement of your tax debt, these ads offer an incorrect understanding that a lot of deals are suitable which most deals will be accepted (even unsuitable offers).
The IRS considers your distinct set of facts and circumstances. So it is essential that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are safeguarded which an appropriate offer is made based upon your:
Capability to pay;
The OIC application needs you to explain your monetary situation in detail, so prior to you proceed you must be willing to make a complete and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Bethlehem Pennsylvania
Prior to the IRS will consider your deal, you should: (1) submit all tax returns you are lawfully needed to file, (2) make all required estimated tax payments for the current year, and (3) make all needed federal tax deposits for the present quarter if you are a company owner with workers. In addition, you are not qualified if you are in an open insolvency proceeding.
The OIC program is a choice for taxpayers who are not able to pay their tax amounts in a swelling sum or through an installation contract and have tired their search for other payment plans. To get approved for the OIC program, taxpayers should have the ability to show and prove that their tax quantity can not be settled under either a lump sum or installation agreement for starters.
All other payment options must be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally jeopardize a tax liability for one of the following factors:
Doubt As To Liability: There is doubt regarding whether the examined tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the overall quantity you owe should be higher than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the quantity owed could be gathered, however you have an economic difficulty or other special circumstances 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 gets the OIC.
Typically, the IRS will not accept an offer if you can pay your tax debt completely through an installment agreement or a swelling sum.
It is necessary to note that penalties and interest will continue to accrue throughout the deal evaluation process.