What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Lake Charles LA is a contract in 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 enables you to settle your tax debt for less than the total you owe. It offers eligible taxpayers with a path toward settling their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the very best interest of both the taxpayer and the IRS. To be thought about, normally you need to make a proper offer based upon what the IRS considers your real ability to pay. It might be a legitimate choice if you can’t pay your full tax liability, or doing so develops a financial challenge.
A common myth or perception thanks to advertisements 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 obtain a lower settlement of your tax debt, these ads offer an incorrect perception that most offers are appropriate and that many offers will be accepted (even inappropriate deals).
The IRS considers your distinct set of realities and circumstances. So it is essential that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are safeguarded which an appropriate deal is made based upon your:
Capability to pay;
The OIC application requires you to explain your monetary scenario in detail, so before you continue you should be willing to make a full and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Lake Charles Louisiana
Before the IRS will consider your offer, you need to: (1) submit all tax returns you are legally required to submit, (2) make all needed approximated tax payments for the current year, and (3) make all needed federal tax deposits for the current quarter if you are an entrepreneur with employees. In addition, you are not qualified if you are in an open insolvency 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 qualify for the OIC program, taxpayers should have the ability to demonstrate and prove that their tax amount can not be settled under either a lump amount or installation contract for starters.
All other payment choices should be thought about 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 factors:
Doubt As To Liability: There is doubt as to whether or not the examined tax is appropriate.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the overall amount you owe should be higher than the sum of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is appropriate and no doubt that the amount owed could be gathered, however you have an economic hardship or other unique circumstances which might allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or fewer months from notice of acceptance.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Usually, the IRS will decline a deal if you can pay your tax debt completely through an installment contract or a lump amount.
It is essential to note that penalties and interest will continue to accrue throughout the offer examination process.