What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Encinitas CA is an arrangement in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, consisting of any interest, penalties, or extra amounts developing 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 qualified taxpayers with a path toward paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that matches the best interest of both the taxpayer and the IRS. To be considered, usually you should make an appropriate deal based upon what the IRS considers your real capability to pay. It may be a genuine choice if you can’t pay your complete tax liability, or doing so develops a financial challenge.
A common misconception or perception 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 get a lower settlement of your tax debt, these advertisements provide an inaccurate understanding that most offers are suitable and that many offers will be accepted (even unsuitable deals).
The IRS considers your unique set of truths and scenarios. So it is very important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are protected which an appropriate offer is made based on your:
Capability to pay;
The OIC application needs you to explain your monetary circumstance in detail, so prior to you proceed you must want to make a complete and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Encinitas California
Prior to the IRS will consider your deal, you should: (1) submit all income tax return you are lawfully required to file, (2) make all needed approximated tax payments for the current year, and (3) make all required federal tax deposits for the existing 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 not able to pay their tax amounts in a swelling amount or through an installment agreement and have tired their search for other payment plans. To receive the OIC program, taxpayers must have the ability to show and prove that their tax quantity can not be settled under either a lump sum or installation agreement for beginners.
All other payment alternatives must be considered before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may lawfully compromise a tax liability for one of the following factors:
Doubt As To Liability: There is doubt as to whether or not the assessed 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 overall amount you owe need to be greater than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is correct and no doubt that the amount owed could be collected, however you have a financial challenge or other special circumstances which may 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 notice of approval.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Typically, the IRS will decline an offer if you can pay your tax debt in full through an installation arrangement or a swelling sum.
It is necessary to note that penalties and interest will continue to accumulate during the offer assessment procedure.
Contact the Tax Attorney Network in Encinitas CA Today at (855) 980-7563
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