What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Santa Rosa 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 additional quantities emerging under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the full amount you owe. It offers eligible taxpayers with a path toward paying off 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 thought about, generally you need to make an appropriate offer based upon what the IRS considers your real ability to pay. It might be a genuine alternative if you can’t pay your full tax liability, or doing so produces a financial hardship.
A common myth or understanding thanks to ads is the impression that taxpayers can easily settle their tax liability “for pennies on the dollar” through the offer in compromise program. While you can definitely acquire a lower settlement of your tax debt, these ads supply an inaccurate perception that a lot of deals are proper and that the majority of offers will be accepted (even improper offers).
The IRS considers your unique set of truths and circumstances. So it is very important that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are secured and that a suitable offer is made based upon your:
Capability to pay;
The OIC application needs you to explain your monetary scenario in detail, so before you proceed you should be willing to make a complete and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Santa Rosa California
Before the IRS will consider your deal, you need to: (1) file all tax returns you are lawfully required to submit, (2) make all required estimated tax payments for the current year, and (3) make all needed federal tax deposits for the current quarter if you are an entrepreneur with workers. In addition, you are not qualified if you are in an open bankruptcy proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a lump sum or through an installment agreement and have actually exhausted their look for other payment plans. To qualify for the OIC program, taxpayers must have the ability to show and prove that their tax amount can not be settled under either a swelling sum or installation agreement for starters.
All other payment alternatives should be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally jeopardize a tax liability for among the following factors:
Doubt As To Liability: There is doubt regarding whether the evaluated tax is proper.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the overall quantity you owe need to be higher than the amount of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is right and no doubt that the quantity owed could be gathered, but you have an economic challenge or other unique scenarios which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or fewer months from notification 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 an offer if you can pay your tax debt in full through an installation arrangement or a lump amount.
It is important to note that penalties and interest will continue to accumulate throughout the offer assessment process.
Contact the Tax Attorney Network in Santa Rosa CA Today at (855) 980-7563
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