What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Haltom City TX is a contract in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, including any interest, penalties, or additional amounts occurring 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 eligible taxpayers with a course towards settling their tax debt and getting a “fresh start.” The supreme objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, normally you should make a proper offer based upon what the IRS considers your real capability to pay. It may be a legitimate alternative if you can’t pay your full tax liability, or doing so creates a financial difficulty.
A typical misconception or understanding thanks to advertisements 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 ads provide an incorrect perception that many deals are suitable which the majority of deals will be accepted (even inappropriate 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 secured and that a proper deal is made based on your:
Ability to pay;
The OIC application needs you to explain your financial scenario in detail, so before you proceed you need to want to make a full and complete disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Haltom City Texas
Before the IRS will consider your deal, you should: (1) file all income tax return you are legally required to file, (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 a company owner with employees. In addition, you are not qualified if you remain in an open bankruptcy proceeding.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a lump amount or through an installation contract and have exhausted their look for other payment plans. To qualify for the OIC program, taxpayers need to be able to demonstrate and prove that their tax amount can not be settled under either a swelling amount or installation arrangement for starters.
All other payment alternatives need to be thought about prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may 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 right.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the overall amount you owe must be higher than the sum of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is proper and no doubt that the quantity owed could be collected, but you have a financial challenge or other unique scenarios which may permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installations within 5 or less months from notice 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 decline a deal if you can pay your tax debt in full through an installment arrangement or a lump amount.
It is necessary to note that penalties and interest will continue to accumulate throughout the offer evaluation process.