What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Hialeah FL is a contract 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 quantities 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 supplies qualified taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The supreme goal is a compromise that matches the very best interest of both the taxpayer and the IRS. To be considered, generally you must make a suitable deal based upon what the IRS considers your real capability to pay. It might be a legitimate option if you can’t pay your complete tax liability, or doing so creates a monetary hardship.
A typical myth or understanding thanks to advertisements 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 acquire a lower settlement of your tax debt, these ads provide an incorrect perception that the majority of offers are appropriate which the majority of deals will be accepted (even unsuitable offers).
The IRS considers your unique set of realities and circumstances. So it is important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are protected which a proper offer is made based on your:
Capability to pay;
The OIC application requires you to explain your monetary circumstance in detail, so prior to you proceed you must be willing to make a full and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Hialeah Florida
Before the IRS will consider your deal, you need to: (1) file all income tax return you are lawfully required to submit, (2) make all needed estimated tax payments for the current year, and (3) make all required federal tax deposits for the existing quarter if you are a business owner with workers. In addition, you are not eligible if you are in an open personal bankruptcy proceeding.
The OIC program is an alternative for taxpayers who are not able to pay their tax quantities in a lump amount or through an installment agreement and have tired their search for other payment arrangements. To get approved for the OIC program, taxpayers should have the ability to demonstrate and show that their tax amount can not be settled under either a swelling sum 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 everybody.
The IRS may legally compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether the evaluated tax is proper.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the total amount you owe must be greater than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is correct and no doubt that the amount owed might be gathered, but you have a financial difficulty or other special situations which may allow 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 notification 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 installation arrangement or a lump sum.
It is important to keep in mind that penalties and interest will continue to accumulate during the offer evaluation procedure.