What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Pembroke Pines FL is an agreement in 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 additional amounts occurring under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the total you owe. It supplies qualified taxpayers with a course towards settling their tax debt and getting a “fresh start.” The supreme objective is a compromise that fits the very best interest of both the taxpayer and the IRS. To be considered, typically you need to make an appropriate offer based on what the IRS considers your true capability to pay. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a monetary hardship.
A typical misconception 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 certainly obtain a lower settlement of your tax debt, these ads provide an inaccurate perception that most offers are proper which most offers 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 an experienced tax expert, such as The Tax Attorney Network, so that your interests are protected which a suitable offer is made based on your:
Capability to pay;
The OIC application needs you to explain your monetary situation in information, so prior to you continue you must be willing to make a complete and complete disclosure in the above locations.
Eligibility For An Offer In Compromise in Pembroke Pines Florida
Before the IRS will consider your deal, you should: (1) submit all income tax return you are lawfully required to submit, (2) make all needed estimated tax payments for the existing year, and (3) make all required federal tax deposits for the existing quarter if you are an entrepreneur with employees. In addition, you are not qualified if you are in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are not able to pay their tax quantities in a lump sum or through an installment arrangement and have actually exhausted their search for other payment plans. To receive the OIC program, taxpayers should have the ability to demonstrate and prove that their tax amount can not be settled under either a swelling amount or installment agreement for beginners.
All other payment choices should be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the overall amount you owe should be higher than the sum of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is right and no doubt that the amount owed might be collected, however you have an economic challenge or other unique scenarios which may allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installations within 5 or fewer months from notification of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Normally, the IRS will not accept a deal if you can pay your tax debt in full through an installment contract or a lump amount.
It is very important to keep in mind that penalties and interest will continue to accrue during the deal evaluation process.