What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Frisco TX is a contract in 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 amounts emerging under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the full amount you owe. It provides qualified taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, normally you need to make an appropriate offer based upon what the IRS considers your real capability to pay. It may be a legitimate option if you can’t pay your full tax liability, or doing so produces a financial difficulty.
A typical myth or perception thanks to ads 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 obtain a lower settlement of your tax debt, these advertisements offer an inaccurate understanding that many deals are proper and that many offers will be accepted (even unsuitable deals).
The IRS considers your distinct set of facts and scenarios. So it is important that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are safeguarded and that a proper deal is made based upon your:
Ability to pay;
The OIC application needs you to explain your monetary circumstance in information, so before you continue you should be willing to make a complete and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Frisco Texas
Prior to the IRS will consider your deal, you should: (1) submit all tax returns you are legally needed to submit, (2) make all required estimated tax payments for the existing year, and (3) make all needed federal tax deposits for the present quarter if you are a company owner with employees. In addition, you are not qualified if you are in an open bankruptcy case.
The OIC program is an alternative for taxpayers who are not able to pay their tax quantities in a swelling sum or through an installation agreement and have tired their look for other payment plans. To qualify for the OIC program, taxpayers must be able to show and show that their tax amount can not be settled under either a swelling amount or installment arrangement for beginners.
All other payment alternatives should be considered before submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally jeopardize a tax liability for among 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 might ever pay the total of the tax owed. In these cases, the total amount you owe must be greater than the amount of your possessions and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is correct and no doubt that the quantity owed might be gathered, but you have an economic difficulty or other special situations which may enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments 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.
Normally, the IRS will not accept an offer if you can pay your tax debt completely through an installment arrangement or a swelling sum.
It is very important to note that penalties and interest will continue to accrue during the offer examination procedure.