What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Orland Park IL is a contract 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 occurring 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 eligible taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate objective is a compromise that fits the best interest of both the taxpayer and the IRS. To be considered, normally you should make a suitable deal based upon what the IRS considers your true ability 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 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 obtain a lower settlement of your tax debt, these advertisements offer an incorrect understanding that many offers are suitable which many deals will be accepted (even improper deals).
The IRS considers your unique set of realities and circumstances. So it is very important that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are secured which an appropriate deal is made based on your:
Ability to pay;
The OIC application requires you to describe your monetary scenario in detail, so before you continue you must be willing to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Orland Park Illinois
Before the IRS will consider your offer, you must: (1) submit all tax returns you are lawfully required to submit, (2) make all required approximated tax payments for the existing year, and (3) make all needed federal tax deposits for the current quarter if you are a business owner with staff members. In addition, you are not eligible if you remain in an open insolvency case.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a swelling amount or through an installment agreement and have exhausted their look for other payment plans. To get approved for the OIC program, taxpayers must have the ability to show 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 before submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully 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 correct.
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 possessions and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is right and no doubt that the quantity owed could be gathered, however you have a financial hardship or other unique situations which might allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments within 5 or fewer 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.
Normally, the IRS will decline an offer if you can pay your tax debt completely through an installment arrangement or a lump sum.
It is necessary to note that penalties and interest will continue to accumulate during the offer examination procedure.