What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Longview TX is an arrangement 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 amounts occurring under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the total you owe. It offers eligible taxpayers with a course towards settling their tax debt and getting a “fresh start.” The ultimate goal is a compromise that fits the best interest of both the taxpayer and the IRS. To be considered, normally you must make a suitable offer based upon what the IRS considers your real ability to pay. It may be a genuine choice if you can’t pay your full tax liability, or doing so produces a financial challenge.
A typical misconception 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 certainly obtain a lower settlement of your tax debt, these ads provide an inaccurate perception that the majority of deals are suitable and that most deals will be accepted (even inappropriate offers).
The IRS considers your distinct set of truths and circumstances. So it is important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are safeguarded and that a proper offer is made based on your:
Capability to pay;
The OIC application requires you to explain your financial circumstance in detail, so before you continue you must be willing to make a complete and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Longview Texas
Before the IRS will consider your offer, you should: (1) submit all tax returns you are legally needed to submit, (2) make all needed estimated tax payments for the current year, and (3) make all required federal tax deposits for the existing quarter if you are a company owner with staff members. In addition, you are not qualified if you remain in an open personal bankruptcy proceeding.
The OIC program is a choice for taxpayers who are unable to pay their tax amounts in a swelling sum or through an installation agreement and have tired their search for other payment plans. To receive the OIC program, taxpayers need to be able to show and show that their tax quantity can not be settled under either a lump amount or installation agreement 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 might lawfully compromise a tax liability for among the following factors:
Doubt As To Liability: There is doubt regarding whether the assessed tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the overall amount you owe must be higher than the amount 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 might be gathered, however you have an economic challenge or other special circumstances which may permit 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 receives the OIC.
Usually, the IRS will decline an offer if you can pay your tax debt in full through an installation contract or a swelling amount.
It is necessary to note that penalties and interest will continue to accrue during the deal evaluation procedure.