What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Mesa AZ is a contract in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, including 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 supplies qualified taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be thought about, usually you need to make a proper offer based on what the IRS considers your real ability to pay. It might be a legitimate choice if you can’t pay your complete tax liability, or doing so creates a monetary difficulty.
A typical misconception or perception thanks to ads 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 ads offer an incorrect perception that most offers are proper which most offers will be accepted (even unsuitable offers).
The IRS considers your special set of truths and scenarios. So it is important that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are protected which a proper offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your financial scenario in detail, so prior to you continue you must want to make a full and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Mesa Arizona
Prior to the IRS will consider your deal, you need to: (1) file all income tax return you are legally required to file, (2) make all needed approximated tax payments for the present year, and (3) make all needed federal tax deposits for the current quarter if you are a company owner with employees. In addition, you are not qualified if you remain in an open insolvency case.
The OIC program is an alternative for taxpayers who are not able to pay their tax amounts in a swelling amount or through an installment arrangement and have tired their search for other payment arrangements. 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 contract for beginners.
All other payment alternatives must be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might legally jeopardize a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether or not the evaluated tax is appropriate.
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 need to be higher than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is correct and no doubt that the amount owed could be gathered, however you have a financial hardship or other unique scenarios which may permit 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 approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Generally, the IRS will not accept a deal if you can pay your tax debt in full through an installment arrangement or a swelling amount.
It is essential to note that penalties and interest will continue to accrue during the deal examination procedure.