What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Lafayette LA 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 extra quantities arising under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the full amount you owe. It supplies qualified taxpayers with a path 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 thought about, usually you should make a proper deal based on what the IRS considers your real capability to pay. It may be a genuine alternative if you can’t pay your complete tax liability, or doing so develops a monetary challenge.
A typical misconception or perception thanks to advertisements is the impression that taxpayers can quickly settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can certainly acquire a lower settlement of your tax debt, these ads supply an incorrect understanding that the majority of deals are appropriate and that many deals will be accepted (even improper offers).
The IRS considers your unique set of realities and circumstances. So it is very important that you have representation from an experienced tax expert, 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 requires you to describe your monetary circumstance in detail, so before you proceed you need to want to make a complete and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Lafayette Louisiana
Prior to the IRS will consider your deal, you need to: (1) submit all tax returns you are legally needed to file, (2) make all needed approximated tax payments for the existing year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with workers. In addition, you are not qualified if you remain in an open insolvency proceeding.
The OIC program is an alternative for taxpayers who are not able to pay their tax amounts in a swelling amount or through an installment agreement and have exhausted their look for other payment plans. To get approved for the OIC program, taxpayers should be able to demonstrate and show that their tax amount can not be settled under either a swelling sum or installation agreement for starters.
All other payment options should be thought about prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully jeopardize a tax liability for one of the following factors:
Doubt As To Liability: There is doubt as to whether the examined tax is proper.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the total quantity you owe should be higher than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the amount owed might be gathered, but you have a financial difficulty or other special circumstances which might 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 notice of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Normally, the IRS will not accept an offer if you can pay your tax debt completely through an installment agreement or a swelling amount.
It is necessary to keep in mind that penalties and interest will continue to accumulate during the offer examination procedure.