What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Lehi UT is a contract in 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 amounts occurring 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 provides qualified taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the best interest of both the taxpayer and the IRS. To be considered, usually you must make a proper deal based upon 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 produces a financial hardship.
A typical myth or understanding thanks to ads is the impression that taxpayers can easily settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can definitely obtain a lower settlement of your tax debt, these ads provide an inaccurate perception that many offers are appropriate and that many deals will be accepted (even inappropriate offers).
The IRS considers your distinct set of facts and scenarios. So it is essential that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are secured which an appropriate deal is made based on your:
Ability to pay;
The OIC application requires you to explain your monetary scenario in information, so before you proceed you should be willing to make a full and complete disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Lehi Utah
Before the IRS will consider your offer, you must: (1) file all income tax return you are legally required to submit, (2) make all required estimated tax payments for the present year, and (3) make all needed federal tax deposits for the existing quarter if you are a company owner with employees. In addition, you are not qualified if you are in an open insolvency case.
The OIC program is a choice for taxpayers who are not able to pay their tax quantities in a lump sum or through an installation arrangement and have actually tired their look for other payment arrangements. To receive the OIC program, taxpayers need to have the ability to show and show that their tax amount can not be settled under either a swelling sum or installation contract for starters.
All other payment options need to be considered before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully compromise a tax liability for one of the following factors:
Doubt As To Liability: There is doubt as to whether the examined tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the total amount you owe need to be higher than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the amount owed could be collected, but you have a financial hardship or other unique scenarios 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 notification of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Typically, the IRS will decline an offer if you can pay your tax debt in full through an installment contract or a swelling amount.
It is necessary to note that penalties and interest will continue to accumulate during the offer assessment process.