What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Hollywood FL is a contract 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 extra amounts emerging 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 course toward paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the best interest of both the taxpayer and the IRS. To be considered, usually you need to make a suitable offer based upon what the IRS considers your true ability to pay. It might be a legitimate option if you can’t pay your complete tax liability, or doing so produces a monetary hardship.
A common misconception or perception thanks to ads is the impression that taxpayers can easily 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 supply an incorrect perception that the majority of offers are appropriate and that a lot of deals will be accepted (even improper offers).
The IRS considers your distinct set of truths and circumstances. So it is important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are secured and that a proper deal is made based upon your:
Ability to pay;
The OIC application needs you to describe your financial scenario in detail, so prior to you continue you need to want to make a full and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Hollywood Florida
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 present quarter if you are a company owner with staff members. In addition, you are not eligible if you are in an open personal bankruptcy proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a swelling sum or through an installation agreement and have exhausted their search for other payment plans. To get approved for the OIC program, taxpayers should have the ability to show and show that their tax quantity can not be settled under either a lump sum or installment arrangement for starters.
All other payment choices need to be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully jeopardize a tax liability for among the following factors:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is correct.
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 need to be greater than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is proper and no doubt that the quantity owed might be collected, however you have a financial challenge or other unique situations which might enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or less months from notification of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Generally, the IRS will decline an offer if you can pay your tax debt completely through an installation contract or a lump sum.
It is important to keep in mind that penalties and interest will continue to accrue during the offer assessment process.
Contact the Tax Attorney Network in Hollywood FL Today at (855) 980-7563
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