What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Cedar Park TX is an arrangement 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, consisting of any interest, penalties, or additional quantities occurring 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 course toward 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 thought about, usually you should make a proper deal based on what the IRS considers your true capability to pay. It may be a genuine alternative if you can’t pay your complete tax liability, or doing so produces a financial challenge.
A typical myth 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 get a lower settlement of your tax debt, these advertisements offer an incorrect perception that the majority of deals are appropriate and that a lot of offers will be accepted (even unsuitable offers).
The IRS considers your special set of facts and situations. So it is important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are safeguarded and that a suitable deal is made based upon your:
Capability to pay;
The OIC application requires you to describe your monetary situation in information, so prior to you continue you should want to make a full and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Cedar Park Texas
Before the IRS will consider your offer, you must: (1) submit all tax returns you are legally required to file, (2) make all required estimated tax payments for the current year, and (3) make all required federal tax deposits for the present quarter if you are a company owner with workers. In addition, you are not qualified if you remain in an open insolvency 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 contract and have tired their look for other payment plans. To get approved for the OIC program, taxpayers must be able to show and prove that their tax quantity can not be settled under either a swelling amount or installment arrangement for starters.
All other payment alternatives must be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether the assessed tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the overall amount you owe should be higher than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is appropriate and no doubt that the amount owed could be collected, but you have an economic hardship or other special scenarios which may allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or less months from notification of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Normally, the IRS will decline a deal if you can pay your tax debt in full through an installment contract or a swelling sum.
It is very important to note that penalties and interest will continue to accumulate throughout the offer evaluation process.