What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Riverside CA is a contract 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 emerging 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 course toward settling their tax debt and getting a “fresh start.” The supreme goal is a compromise that fits the best interest of both the taxpayer and the IRS. To be considered, generally you must make a suitable deal based upon what the IRS considers your real capability to pay. It might be a genuine alternative if you can’t pay your full tax liability, or doing so develops a financial hardship.
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 get a lower settlement of your tax debt, these advertisements provide an inaccurate perception that most deals are suitable and that most deals will be accepted (even unsuitable deals).
The IRS considers your unique set of realities and circumstances. 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 which a proper deal is made based upon your:
Ability to pay;
The OIC application requires you to explain your monetary situation in information, so prior to you proceed you must be willing to make a full and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Riverside California
Prior to the IRS will consider your deal, you need to: (1) submit all tax returns you are lawfully required to file, (2) make all needed estimated tax payments for the present year, and (3) make all needed federal tax deposits for the current quarter if you are a company owner with staff members. In addition, you are not eligible if you remain in an open bankruptcy case.
The OIC program is an alternative for taxpayers who are not able to pay their tax quantities in a swelling sum or through an installation agreement and have exhausted their look for other payment arrangements. To get approved for the OIC program, taxpayers must be able to show and show that their tax quantity can not be settled under either a swelling sum or installment agreement for beginners.
All other payment choices must be thought about prior to sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might legally compromise a tax liability for one of the following factors:
Doubt As To Liability: There is doubt regarding whether or not the examined tax is proper.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the overall quantity you owe should be higher than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is correct and no doubt that the quantity owed could be collected, however you have an economic difficulty or other special situations which may permit 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 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 in full through an installment arrangement or a swelling amount.
It is important to keep in mind that penalties and interest will continue to accrue during the deal examination procedure.
Contact the Tax Attorney Network in Riverside CA Today at (855) 980-7563
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