What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Santa Clarita CA is an arrangement 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 amounts emerging 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 provides eligible taxpayers with a path towards settling their tax debt and getting a “fresh start.” The supreme objective is a compromise that matches the 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 might be a genuine choice if you can’t pay your full tax liability, or doing so produces a financial hardship.
A common misconception 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 certainly acquire a lower settlement of your tax debt, these advertisements offer an inaccurate perception that most deals are suitable which a lot of offers will be accepted (even improper offers).
The IRS considers your special set of truths and scenarios. So it is essential that you have representation from a skilled tax expert, such as The Tax Attorney Network, so that your interests are safeguarded which an appropriate offer is made based on your:
Ability to pay;
The OIC application needs you to explain your monetary scenario in information, so prior to you proceed you must be willing to make a complete and complete disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Santa Clarita California
Prior to the IRS will consider your offer, you should: (1) file all income tax return you are legally needed to file, (2) make all needed estimated tax payments for the existing year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with workers. In addition, you are not eligible if you are in an open insolvency proceeding.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a lump sum or through an installment arrangement and have tired their search for other payment arrangements. To qualify for the OIC program, taxpayers should be able to show and show that their tax quantity can not be settled under either a swelling amount or installation agreement for starters.
All other payment alternatives must be thought about prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether the assessed 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 overall quantity you owe need to be greater than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the examined tax is proper and no doubt that the amount owed could be gathered, however you have a financial challenge or other unique scenarios which may allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or less 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.
Generally, the IRS will decline a deal if you can pay your tax debt in full through an installment agreement or a lump sum.
It is important to keep in mind that penalties and interest will continue to accumulate throughout the deal assessment process.
Contact the Tax Attorney Network in Santa Clarita CA Today at (855) 980-7563
Map of Santa Clarita CA