What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Gilbert AZ is an agreement 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 amounts arising 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 eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the best interest of both the taxpayer and the IRS. To be considered, normally you need to make a suitable deal based on what the IRS considers your real ability to pay. It might be a legitimate alternative if you can’t pay your full tax liability, or doing so develops a monetary hardship.
A common misconception or perception 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 obtain a lower settlement of your tax debt, these ads offer an inaccurate understanding that most offers are proper and that many deals will be accepted (even unsuitable offers).
The IRS considers your special set of facts and circumstances. So it is necessary that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are protected which a suitable offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your financial scenario in detail, so prior to you proceed you must be willing to make a complete and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Gilbert Arizona
Before the IRS will consider your offer, you must: (1) submit all tax returns you are lawfully required to submit, (2) make all required approximated tax payments for the present 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 insolvency proceeding.
The OIC program is a choice for taxpayers who are not able to pay their tax amounts in a swelling amount or through an installation contract and have exhausted their search 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 contract for beginners.
All other payment alternatives need to be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might legally jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether the examined tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the overall quantity you owe must be greater than the sum 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 amount owed could be gathered, but you have a financial 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 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.
Normally, the IRS will decline a deal if you can pay your tax debt in full through an installment agreement or a swelling amount.
It is very important to note that penalties and interest will continue to accrue during the deal examination process.