What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Grand Prairie TX is an agreement 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 developing under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the total you owe. It offers qualified taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The supreme objective is a compromise that fits the very best interest of both the taxpayer and the IRS. To be considered, typically you should make an appropriate deal based upon what the IRS considers your real capability to pay. It might be a genuine alternative if you can’t pay your full tax liability, or doing so develops a monetary challenge.
A typical myth 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 certainly get a lower settlement of your tax debt, these ads offer an inaccurate perception that the majority of offers are appropriate which the majority of deals will be accepted (even inappropriate offers).
The IRS considers your special set of realities and scenarios. So it is important that you have representation from a skilled tax expert, such as The Tax Attorney Network, so that your interests are protected and that a proper offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your financial scenario in information, so prior to you continue you should be willing to make a full and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Grand Prairie Texas
Before the IRS will consider your deal, you need to: (1) file all tax returns you are legally needed to submit, (2) make all needed estimated tax payments for the existing year, and (3) make all needed federal tax deposits for the current quarter if you are a business owner with workers. In addition, you are not eligible if you remain in an open personal bankruptcy case.
The OIC program is a choice for taxpayers who are unable to pay their tax quantities in a lump sum or through an installation contract and have tired their look for other payment plans. To qualify for the OIC program, taxpayers should be able to demonstrate and prove that their tax amount can not be settled under either a swelling amount or installment contract for starters.
All other payment options should be considered before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether or not the assessed tax is proper.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the overall amount you owe must be greater than the amount of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is right and no doubt that the amount owed could be gathered, but you have an economic difficulty or other special situations which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installations within 5 or fewer months from notice of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Generally, the IRS will not accept a deal if you can pay your tax debt in full through an installment agreement or a lump sum.
It is very important to keep in mind that penalties and interest will continue to accumulate during the offer assessment procedure.