What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Brentwood TN is an agreement 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 extra amounts developing 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 course towards paying off 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 considered, generally you must make a suitable offer based on what the IRS considers your true capability to pay. It may be a genuine option if you can’t pay your complete tax liability, or doing so produces a financial difficulty.
A common myth or perception thanks to ads is the impression that taxpayers can quickly 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 supply an incorrect perception that a lot of deals are proper which the majority of offers will be accepted (even inappropriate offers).
The IRS considers your unique set of realities and circumstances. 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 an appropriate deal is made based on your:
Capability to pay;
The OIC application requires you to explain your monetary scenario in information, so before you proceed you must be willing to make a full and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Brentwood Tennessee
Prior to the IRS will consider your offer, you should: (1) submit all tax returns you are legally required to submit, (2) make all needed approximated tax payments for the current year, and (3) make all needed federal tax deposits for the existing quarter if you are a company owner with staff members. In addition, you are not eligible if you remain in an open personal bankruptcy case.
The OIC program is a choice for taxpayers who are unable to pay their tax amounts in a lump amount or through an installation agreement and have tired their look for other payment arrangements. To receive the OIC program, taxpayers need to be able to demonstrate and show that their tax quantity can not be settled under either a lump sum or installation contract for starters.
All other payment choices need to 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 among the following reasons:
Doubt As To Liability: There is doubt as to whether the assessed tax is right.
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 need to be higher than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is proper and no doubt that the quantity owed could be gathered, but you have a financial challenge or other special situations which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations 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 receives the OIC.
Normally, the IRS will not accept a deal if you can pay your tax debt completely through an installment arrangement or a lump sum.
It is very important to note that penalties and interest will continue to accumulate during the deal examination process.