What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Cypress CA is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, consisting of any interest, penalties, or additional quantities arising 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 offers eligible taxpayers with a course toward 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 thought about, normally you should make a proper deal based on what the IRS considers your real ability to pay. It may be a genuine option if you can’t pay your complete tax liability, or doing so produces a monetary hardship.
A common misconception or understanding thanks to ads is the impression that taxpayers can easily 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 ads supply an incorrect understanding that a lot of deals are suitable which a lot of deals will be accepted (even unsuitable deals).
The IRS considers your unique set of realities and circumstances. So it is very important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are protected and that a suitable deal is made based on your:
Capability to pay;
The OIC application requires you to explain your financial circumstance in information, so before you proceed you need to want to make a full and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Cypress California
Before the IRS will consider your offer, you must: (1) submit all income tax return you are lawfully needed to file, (2) make all required approximated tax payments for the existing year, and (3) make all required federal tax deposits for the present quarter if you are an entrepreneur with employees. In addition, you are not eligible if you remain in an open insolvency proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a swelling sum or through an installment arrangement and have exhausted their search for other payment plans. To qualify for the OIC program, taxpayers need to be able to show and show that their tax quantity can not be settled under either a lump sum or installation agreement for starters.
All other payment choices should be considered before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether the assessed tax is proper.
Doubt As To Collectability: There is doubt that you could 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 properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is appropriate and no doubt that the quantity owed might be collected, but you have a financial challenge or other special scenarios which might enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer 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 receives the OIC.
Normally, the IRS will not accept a deal if you can pay your tax debt in full through an installation agreement or a lump sum.
It is important to note that penalties and interest will continue to accumulate during the deal examination procedure.
Contact the Tax Attorney Network in Cypress CA Today at (855) 980-7563
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