What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Edmonds WA is an arrangement 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 occurring 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 offers eligible taxpayers with a course toward paying off their tax debt and getting a “fresh start.” The supreme goal is a compromise that matches the very best interest of both the taxpayer and the IRS. To be thought about, typically you need to make a proper deal based upon what the IRS considers your true capability to pay. It may be a legitimate option if you can’t pay your complete tax liability, or doing so develops a financial challenge.
A common misconception or understanding thanks to advertisements is the impression that taxpayers can quickly settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can certainly acquire a lower settlement of your tax debt, these advertisements provide an incorrect understanding that most deals are suitable which most deals will be accepted (even unsuitable deals).
The IRS considers your unique set of facts and scenarios. So it is essential 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 offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your monetary situation in information, so before you continue you must want to make a complete and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Edmonds Washington
Prior to the IRS will consider your deal, you must: (1) file all income tax return you are lawfully required to file, (2) make all needed estimated tax payments for the present 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 are 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 amount or through an installment contract and have actually tired their look for other payment arrangements. To qualify for the OIC program, taxpayers should have the ability to show and show that their tax amount can not be settled under either a swelling sum or installment arrangement for beginners.
All other payment choices should be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally jeopardize a tax liability for among the following factors:
Doubt As To Liability: There is doubt as to whether the assessed tax is correct.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the total quantity you owe need to be greater than the sum of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is appropriate and no doubt that the amount owed could be gathered, but you have an economic challenge or other unique circumstances which might permit 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 notification of acceptance.
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 an offer if you can pay your tax debt in full through an installment arrangement or a lump sum.
It is important to keep in mind that penalties and interest will continue to accumulate during the deal evaluation procedure.