What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Jacksonville FL is an arrangement 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 quantities arising under the Internal Revenue Code.
An offer in compromise allows 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 suits the best interest of both the taxpayer and the IRS. To be considered, typically 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 full tax liability, or doing so develops a monetary difficulty.
A common misconception 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 obtain a lower settlement of your tax debt, these ads provide an inaccurate understanding that a lot of offers are proper which most offers will be accepted (even inappropriate deals).
The IRS considers your special set of truths and scenarios. So it is important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are safeguarded which a proper offer is made based on your:
Ability to pay;
The OIC application needs you to explain your monetary situation in information, so before you proceed you should want to make a complete and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Jacksonville Florida
Before the IRS will consider your offer, you must: (1) submit all tax returns you are lawfully required to file, (2) make all needed estimated tax payments for the current year, and (3) make all needed federal tax deposits for the current quarter if you are a company owner with staff members. In addition, you are not eligible if you are in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a lump amount or through an installment agreement and have exhausted their search for other payment plans. To get approved for the OIC program, taxpayers should have the ability to demonstrate and show that their tax quantity can not be settled under either a lump amount or installment contract for starters.
All other payment choices must be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might legally compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether or not the evaluated tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the total quantity you owe must be higher than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the quantity owed could be gathered, however you have an economic challenge or other unique scenarios which may enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations 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 swelling sum.
It is very important to note that penalties and interest will continue to accrue during the deal evaluation process.