What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Lowell MA 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, consisting of any interest, penalties, or extra 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 paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the very best interest of both the taxpayer and the IRS. To be considered, typically you need to make an appropriate deal based upon what the IRS considers your true ability to pay. It might be a legitimate choice if you can’t pay your full tax liability, or doing so produces a monetary hardship.
A common myth or understanding thanks to advertisements 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 advertisements offer an incorrect perception that most deals are appropriate and that many deals will be accepted (even inappropriate offers).
The IRS considers your unique set of facts and situations. So it is very 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 suitable offer is made based on your:
Ability to pay;
The OIC application needs you to describe your financial circumstance in information, so before you continue you must want to make a full and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Lowell Massachusetts
Before the IRS will consider your offer, you should: (1) submit all income tax return you are lawfully needed to submit, (2) make all needed 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 workers. In addition, you are not qualified if you are in an open personal bankruptcy case.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a swelling amount or through an installment contract and have actually tired their search for other payment plans. To qualify for the OIC program, taxpayers should be able to demonstrate and prove that their tax amount can not be settled under either a lump amount or installation arrangement for beginners.
All other payment alternatives must 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 one of the following factors:
Doubt As To Liability: There is doubt regarding whether or not 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 greater than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the quantity owed could be gathered, but you have a financial difficulty or other special circumstances which might enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations 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.
Normally, the IRS will not accept an offer if you can pay your tax debt completely through an installment contract or a swelling sum.
It is important to note that penalties and interest will continue to accumulate throughout the offer examination process.