What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Fitchburg MA is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, including any interest, penalties, or additional quantities 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 provides eligible taxpayers with a path toward settling their tax debt and getting a “fresh start.” The supreme goal is a compromise that suits the very best interest of both the taxpayer and the IRS. To be considered, typically you need to make a suitable offer based on what the IRS considers your real capability to pay. It may be a genuine option if you can’t pay your complete tax liability, or doing so creates a monetary challenge.
A common misconception or understanding thanks to advertisements 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 definitely acquire a lower settlement of your tax debt, these advertisements provide an inaccurate perception that the majority of offers are suitable and that the majority of offers will be accepted (even unsuitable offers).
The IRS considers your unique set of facts and scenarios. So it is very important that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are protected and that a proper deal is made based on your:
Ability to pay;
The OIC application needs you to explain your monetary scenario in detail, so before you continue you should be willing to make a complete and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Fitchburg Massachusetts
Prior to the IRS will consider your deal, you must: (1) submit all income tax return 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 company owner with staff members. In addition, you are not qualified if you remain in an open insolvency case.
The OIC program is an option for taxpayers who are not able to pay their tax quantities in a lump amount or through an installation arrangement and have tired their look for other payment plans. To get approved for the OIC program, taxpayers must be able to demonstrate and prove that their tax quantity can not be settled under either a lump amount or installation contract for beginners.
All other payment alternatives need to be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is proper.
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 should be greater than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the quantity owed might be gathered, however you have an economic challenge or other unique situations which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or less 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.
Generally, the IRS will not accept a deal if you can pay your tax debt in full through an installment agreement or a swelling sum.
It is important to note that penalties and interest will continue to accrue during the offer examination procedure.