What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Decatur AL 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, including any interest, penalties, or extra amounts arising under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the total you owe. It supplies eligible taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, typically you need to make a proper offer based upon what the IRS considers your real capability to pay. It might be a legitimate option if you can’t pay your full tax liability, or doing so creates a monetary hardship.
A typical myth or perception thanks to advertisements 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 definitely obtain a lower settlement of your tax debt, these advertisements offer an incorrect understanding that many offers are suitable which most offers will be accepted (even inappropriate offers).
The IRS considers your unique set of realities and situations. So it is important that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are secured which a suitable deal is made based on your:
Capability to pay;
The OIC application requires you to describe your monetary circumstance in information, so prior to you proceed you should want to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Decatur Alabama
Before the IRS will consider your offer, you need to: (1) submit all tax returns you are lawfully required to file, (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 an entrepreneur with workers. In addition, you are not eligible if you are in an open insolvency proceeding.
The OIC program is an option for taxpayers who are not able to pay their tax amounts in a lump sum or through an installment contract and have actually exhausted their look for other payment arrangements. To get approved for the OIC program, taxpayers should be able to demonstrate and prove that their tax amount can not be settled under either a lump sum or installation arrangement for starters.
All other payment choices need to be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether or not the evaluated tax is appropriate.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the overall quantity you owe need to be higher than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is right and no doubt that the amount owed could be gathered, however you have a financial challenge or other special circumstances which might enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or fewer 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 decline a deal if you can pay your tax debt in full through an installment contract or a swelling amount.
It is important to keep in mind that penalties and interest will continue to accrue throughout the deal assessment process.