What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Kissimmee FL is an agreement 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 additional quantities 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 provides qualified taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that fits the very best interest of both the taxpayer and the IRS. To be considered, generally you should make an appropriate deal based on what the IRS considers your real ability to pay. It may be a genuine option if you can’t pay your full tax liability, or doing so creates a monetary hardship.
A common misconception or understanding thanks to ads is the impression that taxpayers can quickly 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 provide an incorrect perception that a lot of deals are proper which a lot of deals will be accepted (even improper offers).
The IRS considers your unique set of realities and situations. So it is very important that you have representation from a skilled tax expert, such as The Tax Attorney Network, so that your interests are secured and that a proper offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your monetary situation in information, so before you proceed you need to be willing to make a full and complete disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Kissimmee Florida
Prior to the IRS will consider your deal, you should: (1) file all tax returns you are lawfully required to submit, (2) make all required estimated tax payments for the present year, and (3) make all required federal tax deposits for the current quarter if you are an entrepreneur with workers. In addition, you are not eligible if you remain in an open insolvency proceeding.
The OIC program is an option for taxpayers who are not able to pay their tax quantities in a swelling amount or through an installation arrangement and have tired their search for other payment arrangements. To get approved for the OIC program, taxpayers need to have the ability to show and prove that their tax quantity can not be settled under either a lump sum or installation contract for beginners.
All other payment choices should be thought about before submitting 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 examined tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the overall amount you owe should be higher than the amount of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is right and no doubt that the quantity owed might be collected, but you have an economic challenge or other unique circumstances 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 notice of approval.
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 a deal if you can pay your tax debt completely through an installment agreement or a lump sum.
It is essential to note that penalties and interest will continue to accrue during the deal examination process.