What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Lancaster PA is an agreement 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 extra quantities arising under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It supplies qualified taxpayers with a course toward paying off 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 thought about, normally you need to make a proper deal based on what the IRS considers your real ability to pay. It might be a legitimate option if you can’t pay your complete tax liability, or doing so develops a monetary difficulty.
A common myth or perception thanks to ads 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 get a lower settlement of your tax debt, these advertisements offer an incorrect understanding that most offers are suitable and that the majority of offers will be accepted (even improper 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 protected and that a suitable offer is made based upon your:
Capability to pay;
The OIC application requires you to describe your monetary scenario in detail, so before you proceed you should be willing to make a complete and complete disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Lancaster Pennsylvania
Prior to the IRS will consider your offer, you should: (1) file 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 present quarter if you are an entrepreneur with workers. In addition, you are not eligible if you are in an open bankruptcy case.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a swelling sum or through an installation agreement and have tired their search for other payment plans. To receive the OIC program, taxpayers should be able to demonstrate and show that their tax quantity can not be settled under either a lump sum or installation agreement for starters.
All other payment options need to be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally jeopardize a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether the assessed tax is correct.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the overall quantity you owe should be higher than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is appropriate and no doubt that the amount owed could be gathered, however you have an economic difficulty or other special circumstances which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer 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 not accept an offer if you can pay your tax debt in full through an installment arrangement or a lump amount.
It is important to note that penalties and interest will continue to accrue throughout the deal evaluation procedure.