What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Olympia WA is an agreement 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 extra amounts developing under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the total you owe. It provides eligible taxpayers with a course 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 thought about, generally you should make a suitable offer based on what the IRS considers your true ability to pay. It might be a genuine alternative if you can’t pay your complete tax liability, or doing so produces a monetary challenge.
A common misconception or understanding thanks to ads is the impression that taxpayers can quickly 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 incorrect understanding that many deals are suitable which most offers will be accepted (even improper deals).
The IRS considers your special set of realities and circumstances. So it is very important that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are secured which a proper deal is made based upon your:
Capability to pay;
The OIC application requires you to describe your monetary circumstance in detail, so prior to you proceed you should be willing to make a complete and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Olympia Washington
Prior to the IRS will consider your offer, you must: (1) file all tax returns you are legally required to file, (2) make all needed estimated tax payments for the existing year, and (3) make all required federal tax deposits for the present quarter if you are a company owner with staff members. In addition, you are not qualified if you remain in an open bankruptcy case.
The OIC program is an alternative for taxpayers who are unable to pay their tax quantities in a swelling sum or through an installation contract and have actually tired their look for other payment arrangements. To receive the OIC program, taxpayers should have the ability to show and prove that their tax quantity can not be settled under either a lump sum or installment agreement for beginners.
All other payment choices need to be thought about prior to submitting 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 factors:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is correct.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the total quantity you owe should be greater than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the amount owed might be collected, but you have an economic challenge or other unique situations 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 approval.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Generally, the IRS will decline a deal if you can pay your tax debt in full through an installation arrangement or a swelling amount.
It is necessary to keep in mind that penalties and interest will continue to accumulate throughout the deal examination process.