What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Lakewood CA is a contract in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, including any interest, penalties, or additional amounts occurring 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 provides qualified taxpayers with a course toward settling their tax debt and getting a “fresh start.” The supreme goal is a compromise that fits the very best interest of both the taxpayer and the IRS. To be considered, normally you need to make an appropriate offer based on what the IRS considers your real capability to pay. It might be a genuine alternative if you can’t pay your full tax liability, or doing so produces a financial difficulty.
A common 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 definitely obtain a lower settlement of your tax debt, these ads supply an inaccurate perception that most deals are suitable which most deals will be accepted (even inappropriate deals).
The IRS considers your special 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 secured and that a proper offer is made based on your:
Capability to pay;
The OIC application requires you to describe your financial scenario in information, so before you continue you need to want to make a complete and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Lakewood California
Before the IRS will consider your deal, you should: (1) submit all income tax return 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 a business owner with employees. In addition, you are not eligible if you remain in an open insolvency proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a swelling amount or through an installment contract and have exhausted their look for other payment arrangements. To receive the OIC program, taxpayers must have the ability to demonstrate and show that their tax amount can not be settled under either a lump sum or installment agreement for starters.
All other payment options should be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may lawfully jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether the evaluated 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 income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is correct and no doubt that the amount owed might be gathered, however you have an economic hardship or other special circumstances which may enable 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 notification of approval.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Generally, the IRS will not accept a deal if you can pay your tax debt in full through an installment agreement or a swelling amount.
It is essential to note that penalties and interest will continue to accumulate throughout the deal evaluation process.
Contact the Tax Attorney Network in Lakewood CA Today at (855) 980-7563
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