What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Flint MI is a contract 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, including any interest, penalties, or additional amounts occurring under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It provides qualified taxpayers with a path toward paying off their tax debt and getting a “fresh start.” The ultimate 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 proper deal based on what the IRS considers your true capability to pay. It might be a genuine option if you can’t pay your complete tax liability, or doing so creates a financial hardship.
A common myth or understanding thanks to advertisements is the impression that taxpayers can easily settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can definitely get a lower settlement of your tax debt, these advertisements provide an incorrect perception that a lot of offers are proper which many deals will be accepted (even unsuitable offers).
The IRS considers your unique set of truths and situations. So it is very important that you have representation from a skilled tax expert, such as The Tax Attorney Network, so that your interests are secured and that an appropriate deal is made based on your:
Ability to pay;
The OIC application needs you to describe your monetary scenario in information, 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 Flint Michigan
Prior to the IRS will consider your deal, you must: (1) submit all income tax return you are lawfully needed to submit, (2) make all required estimated tax payments for the existing year, and (3) make all required federal tax deposits for the current quarter if you are an entrepreneur with staff members. In addition, you are not qualified if you are in an open bankruptcy proceeding.
The OIC program is an alternative for taxpayers who are not able to pay their tax amounts in a swelling amount or through an installation arrangement and have actually exhausted their search for other payment arrangements. To get approved for the OIC program, taxpayers need to have the ability to show and prove that their tax amount can not be settled under either a lump sum or installment contract for starters.
All other payment choices should be thought about prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the assessed tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the overall quantity you owe need to be greater than the sum of your possessions and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is right and no doubt that the quantity owed could be gathered, however you have a financial hardship or other unique scenarios which may enable 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 gets the OIC.
Typically, the IRS will not accept a deal if you can pay your tax debt in full through an installment agreement or a lump sum.
It is important to note that penalties and interest will continue to accrue throughout the deal evaluation process.