What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Boca Raton FL is an arrangement between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This uses to all taxes, including any interest, penalties, or additional amounts emerging 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 path towards paying off their tax debt and getting a “fresh start.” The supreme goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, usually you need to make a proper offer based on what the IRS considers your true ability to pay. It may be a legitimate choice if you can’t pay your full tax liability, or doing so produces a monetary challenge.
A typical myth 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 definitely get a lower settlement of your tax debt, these advertisements provide an inaccurate understanding that a lot of deals are proper which most offers will be accepted (even inappropriate deals).
The IRS considers your special set of facts and circumstances. 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 on your:
Capability to pay;
The OIC application needs you to explain your financial circumstance in detail, so prior to you proceed you need to want to make a complete and complete disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Boca Raton Florida
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 approximated 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 employees. In addition, you are not eligible if you are in an open bankruptcy proceeding.
The OIC program is a choice for taxpayers who are unable to pay their tax quantities in a swelling sum or through an installation agreement and have exhausted their look for other payment arrangements. To get approved for the OIC program, taxpayers should have the ability to demonstrate and prove that their tax amount can not be settled under either a lump amount or installation contract for starters.
All other payment choices need to be considered before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully jeopardize a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether the examined 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 amount you owe must be higher than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the amount owed could be gathered, however you have a financial difficulty or other unique circumstances which might allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations within 5 or fewer months from notification of approval.
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 installation contract or a swelling amount.
It is necessary to keep in mind that penalties and interest will continue to accrue during the offer examination procedure.