What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Lombard IL is an arrangement 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 quantities emerging 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 offers eligible taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The supreme goal is a compromise that fits the best interest of both the taxpayer and the IRS. To be considered, usually you should make a suitable deal based upon what the IRS considers your true capability to pay. It might be a genuine option if you can’t pay your complete tax liability, or doing so creates a monetary hardship.
A typical 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 get a lower settlement of your tax debt, these ads offer an incorrect perception that many deals are suitable and that the majority of deals will be accepted (even improper offers).
The IRS considers your unique set of realities and situations. So it is important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are safeguarded which a suitable offer is made based upon your:
Capability to pay;
The OIC application requires you to explain your monetary situation in information, so prior to you continue you must want to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Lombard Illinois
Prior to the IRS will consider your deal, you should: (1) file all income tax return you are legally required to submit, (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 company owner with employees. In addition, you are not qualified if you are in an open personal bankruptcy proceeding.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a swelling amount or through an installation contract and have exhausted their search for other payment arrangements. To qualify for the OIC program, taxpayers must be able to show and prove that their tax amount can not be settled under either a swelling amount or installment agreement for starters.
All other payment choices need to be considered before 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 reasons:
Doubt As To Liability: There is doubt regarding whether or not the assessed tax is proper.
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 must be greater than the amount of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is appropriate and no doubt that the amount owed might be gathered, however you have an economic challenge or other special situations which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installations within 5 or less 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.
Typically, the IRS will decline a deal if you can pay your tax debt in full through an installment agreement or a lump sum.
It is very important to keep in mind that penalties and interest will continue to accrue during the deal assessment procedure.