What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Pinellas Park FL is an arrangement 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 extra quantities 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 qualified taxpayers with a course toward paying off their tax debt and getting a “fresh start.” The supreme goal is a compromise that matches the best interest of both the taxpayer and the IRS. To be considered, generally 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 produces a monetary challenge.
A common myth or understanding thanks to ads 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 acquire a lower settlement of your tax debt, these ads supply an inaccurate perception that most deals are proper which a lot of offers will be accepted (even unsuitable offers).
The IRS considers your special set of facts and situations. So it is essential that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are secured which an appropriate deal is made based upon your:
Ability to pay;
The OIC application needs you to explain your financial scenario in detail, so prior to you continue you need to want to make a complete and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Pinellas Park Florida
Before the IRS will consider your offer, you must: (1) file all tax returns you are lawfully needed to file, (2) make all needed estimated tax payments for the current year, and (3) make all needed federal tax deposits for the existing quarter if you are an entrepreneur with employees. In addition, you are not qualified if you remain in an open insolvency case.
The OIC program is a choice for taxpayers who are unable to pay their tax amounts in a swelling sum or through an installment arrangement and have exhausted their search for other payment plans. To get approved for the OIC program, taxpayers need to have the ability to demonstrate and prove that their tax quantity can not be settled under either a lump amount or installation contract for beginners.
All other payment alternatives should be thought about prior to submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally jeopardize a tax liability for among the following factors:
Doubt As To Liability: There is doubt as to whether the examined tax is proper.
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 amount of your properties 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 special situations which might allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations within 5 or fewer 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 decline an offer if you can pay your tax debt in full through an installment arrangement or a swelling sum.
It is very important to keep in mind that penalties and interest will continue to accrue during the offer examination process.