What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Muskegon MI is an agreement in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, including any interest, penalties, or additional amounts arising under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the total you owe. It provides eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that matches the very best interest of both the taxpayer and the IRS. To be considered, normally you need to make a proper offer based on what the IRS considers your true ability to pay. It may be a genuine alternative if you can’t pay your complete tax liability, or doing so produces a financial challenge.
A typical myth 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 supply an inaccurate perception that many offers are appropriate and that a lot of offers will be accepted (even improper offers).
The IRS considers your distinct set of realities and situations. So it is important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are protected which a suitable deal is made based on your:
Capability to pay;
The OIC application needs you to describe your monetary circumstance in information, so prior to you continue you need to be willing to make a full and complete disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Muskegon Michigan
Prior to the IRS will consider your offer, you should: (1) file all tax returns you are lawfully required to file, (2) make all needed estimated tax payments for the current year, and (3) make all required federal tax deposits for the current quarter if you are an entrepreneur with workers. In addition, you are not qualified if you remain in an open insolvency case.
The OIC program is a choice for taxpayers who are not able to pay their tax amounts in a lump sum or through an installment agreement and have exhausted their search for other payment arrangements. To receive the OIC program, taxpayers must be able to show and prove that their tax quantity can not be settled under either a lump amount or installment contract for starters.
All other payment choices should be considered before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully jeopardize a tax liability for one of the following factors:
Doubt As To Liability: There is doubt as to whether the examined tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the overall quantity you owe should be greater than the amount of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is correct and no doubt that the amount owed could be collected, however you have an economic difficulty or other special circumstances which may enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations 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 gets the OIC.
Typically, the IRS will not accept an offer if you can pay your tax debt completely through an installation arrangement or a lump sum.
It is important to note that penalties and interest will continue to accrue during the offer assessment process.