What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Irvine CA 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, consisting of any interest, penalties, or additional amounts emerging under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the full amount you owe. It supplies eligible taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, usually you must make a suitable offer based upon what the IRS considers your real ability to pay. It may be a legitimate choice if you can’t pay your complete tax liability, or doing so creates a monetary difficulty.
A typical myth or understanding 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 certainly acquire a lower settlement of your tax debt, these ads provide an incorrect understanding that most deals are suitable which the majority of offers will be accepted (even inappropriate deals).
The IRS considers your distinct set of realities and scenarios. So it is very important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are protected which a suitable offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your financial situation in detail, so prior to you continue you must want to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Irvine California
Before the IRS will consider your offer, you need to: (1) submit all tax returns you are legally needed to file, (2) make all needed estimated tax payments for the present year, and (3) make all needed federal tax deposits for the present quarter if you are a business owner with staff members. In addition, you are not qualified 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 tired their look for other payment plans. To qualify for the OIC program, taxpayers should have the ability to demonstrate and show that their tax quantity can not be settled under either a swelling sum or installation agreement 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 may lawfully compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether the assessed 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 overall quantity you owe should be higher than the amount of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is correct and no doubt that the amount owed might be collected, but you have a financial challenge or other unique circumstances which may permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less 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 receives the OIC.
Usually, the IRS will not accept an offer if you can pay your tax debt completely through an installment contract or a lump sum.
It is necessary to note that penalties and interest will continue to accumulate throughout the deal assessment procedure.
Contact the Tax Attorney Network in Irvine CA Today at (855) 980-7563
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