What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Salt Lake City UT 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, consisting of any interest, penalties, or extra quantities occurring 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 supplies qualified taxpayers with a path towards paying off 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 thought about, typically you need to make an appropriate deal based on what the IRS considers your true capability to pay. It might be a legitimate alternative if you can’t pay your full tax liability, or doing so produces a financial challenge.
A typical myth or perception 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 incorrect perception that many deals are proper and that many offers will be accepted (even inappropriate deals).
The IRS considers your special set of facts and situations. So it is essential that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are secured and that a proper offer is made based on your:
Ability to pay;
The OIC application requires you to explain your financial situation in detail, so before you continue you must want to make a complete and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Salt Lake City Utah
Prior to the IRS will consider your offer, you need to: (1) file all tax returns you are lawfully needed to file, (2) make all needed approximated tax payments for the current year, and (3) make all needed federal tax deposits for the existing quarter if you are a business owner with workers. In addition, you are not qualified if you are in an open insolvency case.
The OIC program is an alternative for taxpayers who are not able to pay their tax quantities in a lump amount or through an installment arrangement and have exhausted their look for other payment arrangements. To qualify for the OIC program, taxpayers must be able to show and prove that their tax amount can not be settled under either a lump amount or installation agreement for starters.
All other payment alternatives should be considered before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may lawfully compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether the examined 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 quantity you owe need to be greater than the sum of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is right and no doubt that the quantity owed might be collected, however you have a financial difficulty or other unique circumstances which might enable 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 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 not accept a deal if you can pay your tax debt completely through an installation contract or a swelling sum.
It is important to note that penalties and interest will continue to accrue throughout the offer examination process.