What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Fort Worth TX is an arrangement 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 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 supplies qualified taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that matches the very best interest of both the taxpayer and the IRS. To be considered, typically you must make a proper deal based on what the IRS considers your true ability to pay. It might be a legitimate option if you can’t pay your complete tax liability, or doing so produces a financial challenge.
A typical myth or understanding thanks to ads 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 get a lower settlement of your tax debt, these advertisements provide an inaccurate understanding that many offers are proper and that most deals will be accepted (even inappropriate deals).
The IRS considers your unique set of facts and situations. 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 safeguarded and that an appropriate offer is made based on your:
Ability to pay;
The OIC application needs you to describe your financial circumstance in detail, so before you proceed you should be willing to make a full and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Fort Worth Texas
Before the IRS will consider your deal, you need to: (1) submit all income tax return you are lawfully required to submit, (2) make all required estimated tax payments for the present year, and (3) make all needed federal tax deposits for the present quarter if you are a business owner with employees. In addition, you are not eligible if you are in an open insolvency proceeding.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a swelling sum or through an installation contract and have actually tired their look for other payment plans. To receive the OIC program, taxpayers must be able to show and prove that their tax quantity can not be settled under either a lump amount or installment agreement for beginners.
All other payment options need to be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the assessed tax is correct.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the total amount you owe must be greater than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the amount owed might be gathered, however you have an economic challenge 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 installations within 5 or less 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.
Typically, the IRS will not accept a deal if you can pay your tax debt completely through an installation contract or a lump sum.
It is necessary to keep in mind that penalties and interest will continue to accrue during the deal evaluation process.