What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Bolingbrook IL is an agreement in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, consisting of any interest, penalties, or additional amounts occurring 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 eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The supreme goal is a compromise that suits the very best interest of both the taxpayer and the IRS. To be considered, typically you need to make a proper offer based upon what the IRS considers your true ability to pay. It might be a legitimate option if you can’t pay your full tax liability, or doing so develops a financial difficulty.
A common misconception or understanding 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 offer an incorrect understanding that most offers are suitable which most deals will be accepted (even improper deals).
The IRS considers your special set of facts and situations. So it is essential that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are protected which an appropriate offer is made based on your:
Capability to pay;
The OIC application requires you to describe your financial situation in information, so before you continue you need to want to make a full and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Bolingbrook Illinois
Before the IRS will consider your deal, you should: (1) file all income tax return you are legally needed to file, (2) make all needed estimated tax payments for the current year, and (3) make all needed federal tax deposits for the current quarter if you are a company owner with staff members. In addition, you are not qualified if you are in an open insolvency case.
The OIC program is an option for taxpayers who are not able to pay their tax amounts in a lump amount or through an installation contract and have actually exhausted their look for other payment plans. To qualify for the OIC program, taxpayers should be able to show and show that their tax amount can not be settled under either a swelling amount or installment agreement for starters.
All other payment options should be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might legally jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether the evaluated tax is correct.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the total amount you owe must be higher than the sum of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is correct and no doubt that the quantity owed might be collected, however you have an economic difficulty or other unique situations which may permit 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.
Normally, the IRS will decline an offer if you can pay your tax debt in full through an installment arrangement or a swelling sum.
It is important to keep in mind that penalties and interest will continue to accrue during the offer evaluation process.