What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Des Moines IA 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 additional quantities occurring under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the total you owe. It offers eligible taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that fits the very best interest of both the taxpayer and the IRS. To be considered, typically you must make an appropriate deal based on what the IRS considers your real ability to pay. It may be a genuine choice if you can’t pay your full tax liability, or doing so creates a financial difficulty.
A common 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 definitely obtain a lower settlement of your tax debt, these ads supply an inaccurate perception that a lot of deals are suitable and that the majority of offers will be accepted (even inappropriate deals).
The IRS considers your unique set of realities and circumstances. So it is very important that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are protected which a proper deal is made based on your:
Ability to pay;
The OIC application needs you to describe your monetary scenario in detail, so prior to you proceed you need to be willing to make a full and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Des Moines Iowa
Before the IRS will consider your offer, you must: (1) file all tax returns you are legally needed to file, (2) make all required estimated tax payments for the current year, and (3) make all required federal tax deposits for the present quarter if you are an entrepreneur with staff members. In addition, you are not qualified if you remain in an open insolvency proceeding.
The OIC program is a choice for taxpayers who are not able to pay their tax amounts in a lump amount or through an installment arrangement and have actually tired their look for other payment arrangements. To receive the OIC program, taxpayers need to be able to show and show that their tax quantity can not be settled under either a swelling sum or installment agreement for beginners.
All other payment options must be considered before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether the examined tax is right.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the total amount you owe must be greater than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is correct and no doubt that the quantity owed could be gathered, however you have a financial difficulty or other unique situations which may permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments within 5 or fewer months from notification of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Generally, the IRS will decline an offer if you can pay your tax debt in full through an installation arrangement or a lump amount.
It is essential to note that penalties and interest will continue to accrue throughout the offer evaluation process.