What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Nashville TN is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, consisting of any interest, penalties, or additional quantities developing under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It provides eligible taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the very best interest of both the taxpayer and the IRS. To be considered, usually you should make an appropriate deal based on what the IRS considers your true capability to pay. It might be a legitimate alternative if you can’t pay your complete tax liability, or doing so develops a financial difficulty.
A typical myth or understanding thanks to ads is the impression that taxpayers can quickly settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can certainly acquire a lower settlement of your tax debt, these ads supply an inaccurate perception that most deals are proper which most offers will be accepted (even improper offers).
The IRS considers your unique set of truths and scenarios. 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 and that an appropriate deal is made based upon your:
Ability to pay;
The OIC application needs you to describe your financial situation in detail, so prior to you continue you need to be willing to make a full and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Nashville Tennessee
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 existing year, and (3) make all needed federal tax deposits for the present quarter if you are a company owner with staff members. In addition, you are not eligible if you remain in an open bankruptcy proceeding.
The OIC program is a choice for taxpayers who are unable to pay their tax amounts in a lump amount or through an installment agreement and have tired their search for other payment plans. To receive the OIC program, taxpayers need to be able to demonstrate and show that their tax quantity can not be settled under either a lump amount or installment agreement for beginners.
All other payment options must be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally compromise a tax liability for one of the following factors:
Doubt As To Liability: There is doubt regarding whether or not the evaluated 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 quantity you owe need to be higher than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is appropriate and no doubt that the amount owed might be gathered, but you have an economic difficulty or other special 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 fewer months from notice of approval.
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 a deal if you can pay your tax debt completely through an installment arrangement or a swelling sum.
It is very important to note that penalties and interest will continue to accumulate during the offer assessment process.