What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in New Bedford MA is an agreement 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 amounts developing 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 eligible taxpayers with a path toward paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, normally you should make an appropriate deal based upon what the IRS considers your true capability to pay. It may be a genuine alternative if you can’t pay your full tax liability, or doing so produces a financial difficulty.
A typical myth or perception thanks to advertisements 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 definitely get a lower settlement of your tax debt, these advertisements provide an incorrect understanding that a lot of deals are suitable which a lot of deals will be accepted (even unsuitable offers).
The IRS considers your unique set of facts and circumstances. 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 secured and that an appropriate deal is made based on your:
Capability to pay;
The OIC application needs you to explain your financial circumstance in detail, so prior to you continue you must be willing to make a full and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in New Bedford Massachusetts
Before the IRS will consider your offer, you need to: (1) submit all income tax return you are legally needed to file, (2) make all needed approximated tax payments for the existing year, and (3) make all needed federal tax deposits for the existing quarter if you are an entrepreneur with staff members. In addition, you are not qualified if you are in an open insolvency proceeding.
The OIC program is an option for taxpayers who are not able to pay their tax amounts in a lump amount or through an installment contract and have actually exhausted their look for other payment arrangements. To receive the OIC program, taxpayers should be able to show and show that their tax amount can not be settled under either a swelling sum or installation arrangement for starters.
All other payment alternatives need to be thought about before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may lawfully jeopardize a tax liability for among the following factors:
Doubt As To Liability: There is doubt regarding whether or not the examined tax is appropriate.
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 possessions and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is proper and no doubt that the amount owed might be collected, but 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 fewer installments within 5 or less months from notification of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Usually, the IRS will not accept an offer if you can pay your tax debt in full through an installment agreement or a swelling amount.
It is very important to keep in mind that penalties and interest will continue to accrue during the deal evaluation process.