What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Santa Monica CA is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This uses to all taxes, including any interest, penalties, or extra quantities occurring under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It provides eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, typically you should make a proper deal based on what the IRS considers your real ability to pay. It may be a genuine alternative 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 cents on the dollar” through the offer in compromise program. While you can definitely acquire a lower settlement of your tax debt, these advertisements provide an incorrect perception that the majority of offers are proper and that the majority of offers will be accepted (even unsuitable deals).
The IRS considers your unique set of facts and scenarios. So it is essential that you have representation from a knowledgeable 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 financial situation in detail, so before you continue you should be willing to make a full and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Santa Monica California
Prior to the IRS will consider your deal, you need to: (1) file all tax returns you are legally needed to submit, (2) make all needed estimated tax payments for the current year, and (3) make all required federal tax deposits for the existing quarter if you are an entrepreneur with employees. In addition, you are not qualified if you remain in an open bankruptcy case.
The OIC program is a choice for taxpayers who are unable to pay their tax amounts in a lump sum or through an installation contract and have actually tired their look for other payment arrangements. To receive the OIC program, taxpayers should be able to demonstrate and show that their tax amount can not be settled under either a swelling amount or installment agreement for starters.
All other payment choices must be thought about prior to submitting 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 factors:
Doubt As To Liability: There is doubt as to whether the evaluated 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 total amount you owe need to be greater than the sum 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 might be collected, but you have an economic challenge or other special circumstances which might allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations within 5 or less months from notification of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Normally, the IRS will decline an offer if you can pay your tax debt in full through an installation arrangement or a swelling amount.
It is necessary to note that penalties and interest will continue to accrue throughout the offer assessment procedure.
Contact the Tax Attorney Network in Santa Monica CA Today at (855) 980-7563
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