What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Burien WA is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the total 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 total you owe. It provides eligible taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate goal is a compromise that matches the very best interest of both the taxpayer and the IRS. To be considered, usually you should make a proper offer based upon what the IRS considers your real ability to pay. It may be a genuine alternative if you can’t pay your full tax liability, or doing so develops a monetary challenge.
A common myth or understanding 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 acquire a lower settlement of your tax debt, these advertisements provide an inaccurate understanding that many offers are proper which the majority of offers will be accepted (even unsuitable deals).
The IRS considers your special set of truths and circumstances. So it is necessary that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are protected which a suitable deal is made based on your:
Ability to pay;
The OIC application requires you to explain your monetary situation in detail, so before you proceed you must be willing to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Burien Washington
Prior to the IRS will consider your deal, you should: (1) file all income tax return you are lawfully needed to submit, (2) make all needed estimated tax payments for the existing year, and (3) make all needed federal tax deposits for the present quarter if you are a business owner with staff members. In addition, you are not qualified if you remain in an open personal bankruptcy case.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a swelling amount or through an installment agreement and have exhausted their search for other payment plans. To qualify for the OIC program, taxpayers need to be able to demonstrate and show that their tax quantity can not be settled under either a lump amount or installation contract for starters.
All other payment alternatives should be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may lawfully jeopardize a tax liability for one of the following factors:
Doubt As To Liability: There is doubt as to whether the assessed 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 overall amount you owe should be higher than the sum of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is proper and no doubt that the quantity owed could be collected, however you have an economic challenge or other special scenarios which might allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments 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 receives the OIC.
Typically, the IRS will not accept a deal if you can pay your tax debt completely through an installation arrangement or a swelling amount.
It is essential to note that penalties and interest will continue to accrue throughout the deal evaluation procedure.