What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Quincy IL is a contract in between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This applies to all taxes, including any interest, penalties, or additional amounts developing 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 course towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that matches the very best interest of both the taxpayer and the IRS. To be considered, typically you must make an appropriate offer based on what the IRS considers your real capability to pay. It may be a legitimate option if you can’t pay your full tax liability, or doing so develops a financial challenge.
A typical misconception or perception thanks to ads 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 certainly get a lower settlement of your tax debt, these ads provide an inaccurate perception that the majority of deals are proper which the majority of deals will be accepted (even unsuitable offers).
The IRS considers your distinct set of truths and situations. So it is essential that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are protected and that a suitable deal is made based on your:
Capability to pay;
The OIC application requires you to describe your monetary scenario in information, 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 Quincy Illinois
Prior to the IRS will consider your offer, you need to: (1) file all tax returns you are lawfully needed to submit, (2) make all required estimated tax payments for the present year, and (3) make all required federal tax deposits for the present quarter if you are a company owner with employees. In addition, you are not qualified if you are in an open personal bankruptcy proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a lump sum or through an installment agreement and have tired their look for other payment plans. To qualify for the OIC program, taxpayers must be able to demonstrate and prove that their tax amount can not be settled under either a lump sum or installment contract for beginners.
All other payment options should be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully jeopardize 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 total of the tax owed. In these cases, the total quantity you owe must be higher than the amount of your possessions and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the quantity owed could be gathered, however you have an economic hardship or other unique scenarios which might 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 notice of approval.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Usually, the IRS will decline an offer if you can pay your tax debt completely through an installment agreement or a swelling sum.
It is very important to note that penalties and interest will continue to accrue during the deal assessment procedure.