What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Medford 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 additional quantities arising under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the total you owe. It provides qualified taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that fits the best interest of both the taxpayer and the IRS. To be considered, usually you need to make a proper deal based upon what the IRS considers your true ability to pay. It might be a legitimate option if you can’t pay your full tax liability, or doing so produces a monetary hardship.
A common myth 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 advertisements provide an incorrect perception that the majority of deals are appropriate which most offers will be accepted (even improper deals).
The IRS considers your special set of realities and situations. So it is necessary that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are safeguarded which a proper deal is made based on your:
Capability to pay;
The OIC application requires you to describe your financial circumstance in detail, so before you continue you should be willing to make a complete and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Medford Massachusetts
Before the IRS will consider your deal, you must: (1) submit all tax returns you are legally required to submit, (2) make all required estimated tax payments for the current year, and (3) make all needed federal tax deposits for the current quarter if you are a company owner with workers. In addition, you are not eligible if you remain in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are unable to pay their tax amounts in a swelling amount or through an installation agreement and have tired their look for other payment plans. To qualify for the OIC program, taxpayers should be able to show and show that their tax amount can not be settled under either a swelling amount or installation contract 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 everyone.
The IRS may legally compromise a tax liability for among the following factors:
Doubt As To Liability: There is doubt regarding whether the assessed tax is proper.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the overall amount you owe must be greater than the amount of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the amount owed might be collected, but you have an economic hardship or other unique scenarios which might allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments 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 receives the OIC.
Normally, the IRS will decline a deal if you can pay your tax debt in full through an installation contract or a lump amount.
It is very important to keep in mind that penalties and interest will continue to accumulate during the deal examination process.