What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Columbia SC 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 additional quantities occurring under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the total you owe. It supplies qualified taxpayers with a path toward paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the very best interest of both the taxpayer and the IRS. To be thought about, generally you should make a suitable offer based upon what the IRS considers your real capability to pay. It may be a legitimate choice if you can’t pay your complete tax liability, or doing so creates a financial difficulty.
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 provide an inaccurate understanding that a lot of offers are appropriate and that most deals will be accepted (even inappropriate deals).
The IRS considers your special set of truths and circumstances. So it is important that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are protected and that a suitable deal is made based on your:
Ability to pay;
The OIC application needs you to describe your financial scenario in detail, so before you proceed you must want to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Columbia South Carolina
Before the IRS will consider your deal, you must: (1) submit all tax returns you are legally needed to submit, (2) make all needed estimated 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 workers. In addition, you are not qualified if you remain in an open personal bankruptcy proceeding.
The OIC program is a choice for taxpayers who are not able to pay their tax quantities in a swelling sum or through an installment contract and have exhausted their search for other payment arrangements. To receive the OIC program, taxpayers need to be able to show and show that their tax quantity can not be settled under either a swelling sum or installation contract for beginners.
All other payment choices must be thought about before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully compromise a tax liability for among 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 total amount you owe must be higher than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is right and no doubt that the quantity owed could be gathered, but you have an economic difficulty or other unique situations 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 fewer 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.
Generally, the IRS will not accept an offer if you can pay your tax debt in full through an installment agreement or a lump sum.
It is important to keep in mind that penalties and interest will continue to accumulate throughout the offer assessment procedure.