What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Boston MA is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, including any interest, penalties, or additional quantities occurring under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the total you owe. It supplies qualified taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the best interest of both the taxpayer and the IRS. To be thought about, usually you need to make a suitable deal based on what the IRS considers your true ability to pay. It may be a legitimate option if you can’t pay your complete tax liability, or doing so produces a monetary difficulty.
A typical misconception or perception 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 certainly acquire a lower settlement of your tax debt, these ads provide an incorrect understanding that the majority of offers are appropriate which many deals will be accepted (even inappropriate offers).
The IRS considers your distinct set of truths 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 and that a suitable offer is made based on your:
Ability to pay;
The OIC application requires you to explain your financial situation in information, so before you continue you need to be willing to make a complete and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Boston Massachusetts
Prior to the IRS will consider your deal, you need to: (1) submit all tax returns you are lawfully needed to submit, (2) make all required estimated tax payments for the existing year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with staff members. In addition, you are not qualified if you are in an open insolvency proceeding.
The OIC program is an alternative for taxpayers who are not able to pay their tax quantities in a lump sum or through an installment agreement and have exhausted their look for other payment plans. To qualify for the OIC program, taxpayers must be able to demonstrate and show that their tax amount can not be settled under either a swelling sum or installment arrangement for starters.
All other payment choices should be thought about before submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully compromise a tax liability for one of the following factors:
Doubt As To Liability: There is doubt regarding whether or not the assessed tax is proper.
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 should be higher than the sum of your possessions and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is appropriate and no doubt that the quantity owed could be gathered, but you have a financial hardship or other special circumstances which may enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installations within 5 or fewer months from notice of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Usually, the IRS will decline a deal if you can pay your tax debt in full through an installation arrangement or a swelling sum.
It is essential to keep in mind that penalties and interest will continue to accrue throughout the deal assessment process.