What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Burlington NC is a contract in 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 quantities emerging under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the full amount you owe. It provides eligible taxpayers with a course towards settling their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, typically you need to make a proper offer based on what the IRS considers your real capability to pay. It may be a genuine option if you can’t pay your full tax liability, or doing so develops a financial difficulty.
A common misconception or perception 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 get a lower settlement of your tax debt, these advertisements offer an inaccurate perception that most offers are appropriate and that many deals will be accepted (even unsuitable deals).
The IRS considers your unique set of facts and situations. So it is important that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are secured and that an appropriate deal is made based on your:
Capability to pay;
The OIC application needs you to explain your financial circumstance in detail, so before you proceed you must want to make a complete and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Burlington North Carolina
Prior to the IRS will consider your deal, you must: (1) submit all income tax return you are legally needed to submit, (2) make all required approximated tax payments for the current year, and (3) make all required federal tax deposits for the present quarter if you are a business owner with staff members. In addition, you are not eligible if you are in an open insolvency case.
The OIC program is an alternative for taxpayers who are not able to pay their tax quantities in a swelling amount or through an installment arrangement and have tired their look for other payment plans. To qualify for the OIC program, taxpayers need to have the ability to demonstrate and show that their tax quantity can not be settled under either a swelling sum or installment contract for starters.
All other payment alternatives should be thought about 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 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 should be greater than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is right and no doubt that the quantity owed could be collected, but you have an economic hardship or other special situations which may enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments within 5 or fewer months from notification of approval.
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 an offer if you can pay your tax debt completely through an installment agreement or a lump amount.
It is very important to note that penalties and interest will continue to accrue during the deal assessment process.