What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Cuyahoga Falls OH is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, consisting of any interest, penalties, or extra amounts arising under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It provides eligible 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, generally you must make a suitable offer based on what the IRS considers your real capability to pay. It might be a legitimate choice if you can’t pay your complete tax liability, or doing so produces a financial hardship.
A common misconception or understanding thanks to advertisements 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 ads provide an incorrect understanding that the majority of deals are appropriate and that many deals will be accepted (even inappropriate offers).
The IRS considers your special set of realities and circumstances. So it is very important that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are safeguarded and that a proper offer is made based upon your:
Capability to pay;
The OIC application needs you to describe your financial situation in detail, so prior to you proceed you need to be willing to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Cuyahoga Falls Ohio
Before the IRS will consider your deal, you must: (1) submit all tax returns you are lawfully needed to submit, (2) make all required approximated tax payments for the existing year, and (3) make all required federal tax deposits for the current quarter if you are a company owner with staff members. In addition, you are not qualified if you are in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a lump sum or through an installation agreement and have tired their search for other payment plans. To receive the OIC program, taxpayers should have the ability to demonstrate and prove that their tax amount can not be settled under either a swelling amount or installment agreement for starters.
All other payment options should be considered before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether the assessed tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the total amount you owe need to be greater than the sum of your possessions and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is correct and no doubt that the quantity owed might be gathered, but you have a financial hardship or other special scenarios which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations within 5 or less months from notice 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 not accept an offer if you can pay your tax debt completely through an installation agreement or a swelling sum.
It is necessary to keep in mind that penalties and interest will continue to accrue during the offer examination process.