What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Marlborough MA 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, consisting of any interest, penalties, or additional quantities occurring under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the full amount you owe. It provides eligible taxpayers with a course towards paying off their tax debt and getting a “fresh start.” The supreme 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 a suitable deal based upon what the IRS considers your real ability to pay. It might be a legitimate alternative if you can’t pay your full tax liability, or doing so creates a financial challenge.
A typical myth or understanding 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 definitely acquire a lower settlement of your tax debt, these advertisements supply an incorrect perception that most deals are appropriate which many deals will be accepted (even unsuitable deals).
The IRS considers your distinct set of truths and situations. So it is important that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are secured which a proper deal is made based on your:
Ability to pay;
The OIC application needs you to explain your financial circumstance in information, so before you proceed you need to be willing to make a full and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Marlborough Massachusetts
Before the IRS will consider your deal, you need to: (1) file all income tax return you are legally needed to file, (2) make all needed estimated tax payments for the current year, and (3) make all required federal tax deposits for the present quarter if you are a business owner with employees. In addition, you are not eligible if you remain in an open bankruptcy proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax amounts in a swelling sum or through an installment contract and have exhausted their search for other payment arrangements. To get approved for the OIC program, taxpayers need to be able to demonstrate and show that their tax amount can not be settled under either a lump amount or installation agreement for starters.
All other payment options must be considered before submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether the evaluated tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the overall quantity you owe need to be greater than the sum of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the quantity owed might be collected, however you have an economic difficulty or other special situations which might allow 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 notification of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Normally, the IRS will decline a deal if you can pay your tax debt in full through an installment arrangement or a swelling sum.
It is very important to keep in mind that penalties and interest will continue to accrue throughout the offer assessment process.