What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Columbia MO 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 quantities developing under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the total you owe. It provides qualified taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that fits the best interest of both the taxpayer and the IRS. To be considered, typically you must make a suitable offer based upon what the IRS considers your true ability to pay. It might be a legitimate alternative if you can’t pay your full tax liability, or doing so creates a financial hardship.
A common misconception 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 advertisements supply an incorrect understanding that the majority of offers are proper which most offers will be accepted (even unsuitable deals).
The IRS considers your unique set of truths and circumstances. So it is important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are secured and that a suitable offer is made based upon your:
Capability to pay;
The OIC application requires you to explain your monetary situation in detail, so prior to you continue you must want to make a full and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Columbia Missouri
Before the IRS will consider your offer, you must: (1) file all tax returns you are lawfully required to file, (2) make all needed approximated tax payments for the present year, and (3) make all needed federal tax deposits for the existing quarter if you are a business owner with employees. In addition, you are not qualified if you are in an open bankruptcy proceeding.
The OIC program is a choice for taxpayers who are unable to pay their tax quantities in a swelling amount or through an installment contract and have actually exhausted their look for other payment plans. To qualify for the OIC program, taxpayers must be able to demonstrate and show that their tax amount can not be settled under either a swelling sum or installation agreement for starters.
All other payment options need to be thought about prior to submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the examined tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the overall amount you owe need to be higher than the amount of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is proper and no doubt that the amount owed might be gathered, but you have an economic challenge or other unique circumstances which may allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations within 5 or fewer 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.
Generally, the IRS will decline a deal if you can pay your tax debt in full through an installation agreement or a lump sum.
It is necessary to keep in mind that penalties and interest will continue to accumulate during the offer examination procedure.