What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Grand Junction CO is an arrangement 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 quantities emerging 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 course toward paying off their tax debt and getting a “fresh start.” The supreme objective is a compromise that fits the best interest of both the taxpayer and the IRS. To be thought about, generally you should make a proper deal based on what the IRS considers your true ability to pay. It might be a legitimate choice if you can’t pay your full tax liability, or doing so produces a monetary challenge.
A common misconception or perception thanks to ads 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 obtain a lower settlement of your tax debt, these ads offer an incorrect perception that most deals are proper which most deals will be accepted (even inappropriate deals).
The IRS considers your distinct set of realities and circumstances. So it is essential that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are safeguarded and that a suitable deal is made based upon your:
Capability to pay;
The OIC application needs you to describe your monetary situation in information, so prior to you continue you must be willing to make a full and complete disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Grand Junction Colorado
Prior to the IRS will consider your deal, you should: (1) submit all tax returns you are lawfully needed to file, (2) make all required approximated tax payments for the current year, and (3) make all needed federal tax deposits for the existing quarter if you are a business owner with employees. In addition, you are not eligible if you remain in an open personal bankruptcy proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a lump amount or through an installment contract and have exhausted their look for other payment plans. To get approved for the OIC program, taxpayers must be able to show and show that their tax quantity can not be settled under either a swelling sum or installation agreement for beginners.
All other payment options need to be thought about prior to sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally jeopardize a tax liability for among the following factors:
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 total quantity you owe need to be higher than the amount of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is right and no doubt that the amount owed might be gathered, but you have a financial 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 fewer months from notification of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Generally, 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 essential to keep in mind that penalties and interest will continue to accrue throughout the deal examination process.