What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Fort Lauderdale FL is a contract in between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This uses 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 supplies qualified taxpayers with a path towards settling 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, usually you should make an appropriate offer based on what the IRS considers your true capability to pay. It might be a legitimate alternative if you can’t pay your full tax liability, or doing so creates a financial difficulty.
A common myth or perception thanks to ads 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 incorrect understanding that the majority of offers are appropriate and that a lot of offers will be accepted (even improper deals).
The IRS considers your special set of facts and scenarios. So it is important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are secured and that a proper deal is made based upon your:
Capability to pay;
The OIC application requires you to explain your monetary scenario in detail, so prior to you continue you should be willing to make a complete and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Fort Lauderdale Florida
Prior to the IRS will consider your deal, you should: (1) file all tax returns you are legally needed to file, (2) make all needed estimated tax payments for the current year, and (3) make all needed federal tax deposits for the existing quarter if you are an entrepreneur with workers. In addition, you are not eligible if you remain in an open insolvency case.
The OIC program is an option for taxpayers who are unable to pay their tax amounts in a lump amount or through an installation arrangement and have actually tired their look for other payment plans. To qualify for the OIC program, taxpayers need to have the ability to demonstrate and prove that their tax quantity can not be settled under either a swelling sum or installation agreement for starters.
All other payment options should be thought about 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 reasons:
Doubt As To Liability: There is doubt regarding whether the examined 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 quantity you owe should be greater than the sum of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is appropriate and no doubt that the amount owed might be gathered, but you have an economic hardship or other special circumstances which may allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations within 5 or less months from notification of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Usually, the IRS will decline a deal if you can pay your tax debt completely through an installment contract or a swelling sum.
It is very important to note that penalties and interest will continue to accrue throughout the offer examination procedure.