What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Harrisburg PA is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, consisting of 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 total you owe. It provides qualified taxpayers with a path towards paying off 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, typically you must make a proper offer based on what the IRS considers your true capability to pay. It might be a legitimate option if you can’t pay your complete tax liability, or doing so produces a monetary challenge.
A common misconception 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 definitely get a lower settlement of your tax debt, these ads supply an incorrect perception that many offers are appropriate and that most deals will be accepted (even unsuitable deals).
The IRS considers your special set of realities and situations. So it is important that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are safeguarded which a suitable offer is made based upon your:
Ability to pay;
The OIC application requires you to explain your financial situation in detail, so before you proceed you must want to make a complete and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Harrisburg Pennsylvania
Prior to the IRS will consider your offer, you need to: (1) file all income tax return you are legally required to submit, (2) make all needed estimated tax payments for the present year, and (3) make all required federal tax deposits for the existing quarter if you are an entrepreneur with employees. 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 not able to pay their tax amounts in a lump sum or through an installation contract and have actually tired their search for other payment plans. To receive the OIC program, taxpayers should have the ability to demonstrate and show that their tax amount can not be settled under either a swelling amount or installment contract for starters.
All other payment choices 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 or not the examined tax is right.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the total amount you owe should be higher than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is correct and no doubt that the amount owed might be gathered, but you have an economic hardship or other special scenarios 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 notification of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Normally, the IRS will decline a deal if you can pay your tax debt completely through an installation contract or a lump sum.
It is necessary to keep in mind that penalties and interest will continue to accumulate throughout the deal evaluation procedure.