What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Deerfield Beach FL is an agreement 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, consisting of any interest, penalties, or additional quantities developing under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the full amount you owe. It provides qualified 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, typically you should make a suitable offer based on what the IRS considers your true capability to pay. It may be a legitimate choice if you can’t pay your complete tax liability, or doing so produces a monetary difficulty.
A typical misconception or understanding thanks to ads is the impression that taxpayers can quickly settle their tax liability “for pennies on the dollar” through the offer in compromise program. While you can certainly obtain a lower settlement of your tax debt, these ads supply an inaccurate understanding that most deals are suitable and that a lot of offers will be accepted (even improper deals).
The IRS considers your unique set of truths and situations. So it is necessary that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are protected and that an appropriate offer is made based upon your:
Capability to pay;
The OIC application requires you to describe your financial scenario in detail, so before you continue you need to want to make a full and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Deerfield Beach Florida
Prior to the IRS will consider your deal, you must: (1) file all tax returns you are lawfully needed to file, (2) make all needed estimated tax payments for the current year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with workers. In addition, you are not qualified if you remain in an open bankruptcy proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a swelling sum or through an installation contract and have actually exhausted their look for other payment arrangements. To qualify for the OIC program, taxpayers should be able to show and prove that their tax quantity can not be settled under either a lump sum or installment arrangement for starters.
All other payment options need to be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally compromise a tax liability for one of the following factors:
Doubt As To Liability: There is doubt regarding whether the examined 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 should be higher than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is appropriate and no doubt that the quantity owed could be gathered, however you have a financial hardship or other special situations which may 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 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 a deal if you can pay your tax debt completely through an installment arrangement or a swelling sum.
It is important to note that penalties and interest will continue to accumulate during the offer examination process.