What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Scottsdale AZ is an arrangement between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This uses to all taxes, including any interest, penalties, or additional quantities occurring under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the total you owe. It provides eligible taxpayers with a course toward settling their tax debt and getting a “fresh start.” The supreme goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be thought about, normally you should make a proper deal based upon what the IRS considers your real capability to pay. It might be a genuine choice if you can’t pay your complete tax liability, or doing so develops a financial difficulty.
A typical myth or understanding thanks to advertisements is the impression that taxpayers can quickly settle their tax liability “for cents 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 incorrect perception that many offers are suitable which the majority of deals will be accepted (even unsuitable deals).
The IRS considers your distinct set of facts and circumstances. So it is important 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 requires you to explain your monetary scenario in information, so prior to you proceed you must be willing to make a complete and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Scottsdale Arizona
Prior to the IRS will consider your deal, you must: (1) file all tax returns you are lawfully needed to file, (2) make all required estimated tax payments for the present 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 qualified if you are in an open bankruptcy case.
The OIC program is a choice for taxpayers who are unable to pay their tax amounts in a lump amount or through an installation agreement and have tired their look for other payment arrangements. To receive the OIC program, taxpayers need to have the ability to demonstrate and prove that their tax amount can not be settled under either a swelling amount or installment arrangement for starters.
All other payment alternatives should be thought about prior to submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may lawfully jeopardize a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is appropriate.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the total quantity you owe need to be greater than the amount of your assets 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 collected, but you have an economic difficulty or other unique circumstances which may 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 notice of approval.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Usually, the IRS will not accept a deal if you can pay your tax debt completely through an installment arrangement or a lump sum.
It is important to note that penalties and interest will continue to accrue during the deal evaluation process.