What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Redwood City CA is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This applies to all taxes, consisting of any interest, penalties, or additional quantities developing 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 eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, typically you need to make an appropriate deal based on what the IRS considers your real ability to pay. It may be a legitimate option if you can’t pay your complete tax liability, or doing so develops a monetary difficulty.
A common misconception or understanding thanks to advertisements 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 ads supply an incorrect perception that most offers are proper which many deals will be accepted (even unsuitable offers).
The IRS considers your special set of facts and situations. So it is important that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are protected and that an appropriate deal is made based on your:
Capability to pay;
The OIC application needs you to describe your monetary circumstance in detail, so before you continue you should want to make a full and complete disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Redwood City California
Prior to the IRS will consider your offer, you should: (1) file all income tax return you are lawfully needed to submit, (2) make all needed estimated 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 are in an open bankruptcy case.
The OIC program is a choice for taxpayers who are unable to pay their tax quantities in a lump sum or through an installment agreement and have exhausted their search for other payment plans. To receive the OIC program, taxpayers need to be able to demonstrate and show that their tax amount can not be settled under either a swelling amount or installment agreement for beginners.
All other payment options should be considered before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether the evaluated tax is right.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the total amount you owe must be higher than the amount of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the quantity owed might be gathered, but you have an economic difficulty or other unique scenarios which may permit 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 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 an offer if you can pay your tax debt completely through an installation agreement or a lump amount.
It is essential to keep in mind that penalties and interest will continue to accumulate during the deal evaluation process.
Contact the Tax Attorney Network in Redwood City CA Today at (855) 980-7563
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