What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Decatur IL is an arrangement 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 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 provides qualified taxpayers with a path toward settling their tax debt and getting a “fresh start.” The supreme goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be thought about, normally you need to make a suitable offer based on what the IRS considers your true ability to pay. It might be a genuine alternative if you can’t pay your complete tax liability, or doing so creates a financial difficulty.
A typical misconception or understanding 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 certainly get a lower settlement of your tax debt, these advertisements provide an incorrect perception that many offers are appropriate which most offers will be accepted (even unsuitable offers).
The IRS considers your unique set of facts and circumstances. So it is necessary that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are protected and that a proper deal is made based on your:
Capability to pay;
The OIC application needs you to describe your financial scenario in information, so prior to you proceed you must want to make a full and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Decatur Illinois
Prior to the IRS will consider your offer, you need to: (1) submit all tax returns you are lawfully required to submit, (2) make all needed estimated tax payments for the present year, and (3) make all needed federal tax deposits for the present quarter if you are a company owner with workers. In addition, you are not qualified if you remain in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are unable to pay their tax amounts in a swelling sum or through an installment agreement and have actually exhausted their search for other payment arrangements. To receive the OIC program, taxpayers should be able to demonstrate and prove that their tax amount can not be settled under either a swelling sum or installation contract for starters.
All other payment choices need to be thought about before submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may lawfully compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is correct.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the total quantity you owe must be higher than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the quantity owed might be collected, but you have a financial difficulty or other unique situations 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 gets the OIC.
Usually, the IRS will decline a deal if you can pay your tax debt completely through an installment agreement or a lump amount.
It is necessary to keep in mind that penalties and interest will continue to accumulate throughout the deal examination procedure.