What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in North Charleston SC is an arrangement in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, consisting of any interest, penalties, or additional quantities arising 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 offers qualified taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the best interest of both the taxpayer and the IRS. To be considered, usually you should make a proper offer based on what the IRS considers your true ability to pay. It may be a legitimate alternative if you can’t pay your full tax liability, or doing so develops a financial challenge.
A common myth or understanding thanks to advertisements is the impression that taxpayers can easily settle their tax liability “for pennies on the dollar” through the offer in compromise program. While you can definitely get a lower settlement of your tax debt, these ads offer an inaccurate perception that many deals are suitable which many deals will be accepted (even unsuitable offers).
The IRS considers your unique set of realities and scenarios. So it is important that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are safeguarded and that an appropriate offer is made based upon your:
Capability to pay;
The OIC application needs you to explain your financial circumstance in information, so before you continue you should be willing to make a full and complete disclosure in the above areas.
Are You Eligible For An Offer In Compromise in North Charleston South Carolina
Prior to the IRS will consider your offer, you need to: (1) submit all income tax return you are lawfully needed 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 a company owner with staff members. In addition, you are not eligible if you remain in an open insolvency proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax amounts in a lump amount or through an installment agreement and have actually exhausted their search for other payment plans. To get approved for the OIC program, taxpayers must be able to demonstrate and show that their tax amount can not be settled under either a swelling sum or installation contract for beginners.
All other payment choices must be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may lawfully jeopardize a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the examined tax is proper.
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 higher than the sum of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is proper and no doubt that the quantity owed might be collected, however you have an economic challenge or other special situations 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 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.
Normally, the IRS will not accept a deal if you can pay your tax debt in full through an installation arrangement or a swelling sum.
It is important to keep in mind that penalties and interest will continue to accrue throughout the offer evaluation procedure.