What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Midland TX 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 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 offers qualified taxpayers with a path toward 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 thought about, usually you should make a suitable offer based upon what the IRS considers your true ability to pay. It might be a legitimate alternative if you can’t pay your complete tax liability, or doing so develops a monetary challenge.
A typical misconception or perception thanks to ads is the impression that taxpayers can easily settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can certainly get a lower settlement of your tax debt, these ads provide an inaccurate understanding that the majority of offers are appropriate and that many deals will be accepted (even improper deals).
The IRS considers your unique set of facts and situations. So it is very important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are protected and that a suitable offer is made based on your:
Capability to pay;
The OIC application requires you to explain your financial scenario in detail, so prior to you proceed you must be willing to make a complete and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Midland Texas
Before the IRS will consider your deal, you need to: (1) submit all income tax return you are lawfully required to submit, (2) make all required estimated tax payments for the current year, and (3) make all needed federal tax deposits for the present quarter if you are an entrepreneur with employees. In addition, you are not eligible if you are in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are not able to pay their tax quantities in a lump amount or through an installment contract and have actually 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 swelling amount or installation agreement for starters.
All other payment choices should be thought about prior to submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the assessed tax is correct.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the total amount you owe must be higher than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is correct and no doubt that the amount owed could be collected, however you have a financial difficulty or other unique situations which may permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments 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.
Typically, the IRS will not accept an offer if you can pay your tax debt in full through an installment contract or a lump sum.
It is very important to note that penalties and interest will continue to accumulate during the deal assessment process.