What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Buckeye AZ is a contract 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 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 eligible taxpayers with a path towards settling 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 thought about, normally you should make a suitable offer based on what the IRS considers your true ability to pay. It might be a genuine choice if you can’t pay your complete tax liability, or doing so develops a monetary hardship.
A typical misconception or understanding thanks to advertisements is the impression that taxpayers can quickly settle their tax liability “for pennies on the dollar” through the offer in compromise program. While you can certainly acquire a lower settlement of your tax debt, these ads offer an incorrect understanding that most deals are appropriate which most deals will be accepted (even unsuitable offers).
The IRS considers your distinct set of facts and scenarios. So it is essential that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are secured which a suitable offer is made based upon your:
Ability to pay;
The OIC application needs you to describe your financial scenario in detail, so before you proceed you need to want to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Buckeye Arizona
Prior to the IRS will consider your offer, you must: (1) submit all income tax return you are legally needed to file, (2) make all required estimated tax payments for the present year, and (3) make all needed federal tax deposits for the current quarter if you are a business owner with employees. In addition, you are not eligible if you remain in an open personal bankruptcy proceeding.
The OIC program is an alternative for taxpayers who are not able to pay their tax amounts in a lump sum or through an installation agreement and have exhausted their search for other payment plans. To get approved for the OIC program, taxpayers need to be able to show and prove that their tax quantity can not be settled under either a lump amount or installment contract for starters.
All other payment alternatives need to be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally compromise a tax liability for among the following factors:
Doubt As To Liability: There is doubt regarding whether or not the assessed tax is appropriate.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the total quantity you owe need to be greater than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is right and no doubt that the amount owed might be gathered, but you have a financial challenge or other special situations which may 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 notice 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 installation agreement or a lump sum.
It is necessary to keep in mind that penalties and interest will continue to accrue throughout the offer examination process.