What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Scranton PA is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This applies to all taxes, including any interest, penalties, or additional amounts arising 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 supplies qualified taxpayers with a course 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, generally you need to make an appropriate deal based upon what the IRS considers your true ability to pay. It might be a legitimate option if you can’t pay your complete tax liability, or doing so produces a financial challenge.
A common myth or perception thanks to advertisements 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 certainly acquire a lower settlement of your tax debt, these advertisements offer an inaccurate understanding that the majority of offers are proper and that many deals will be accepted (even improper deals).
The IRS considers your unique set of realities and circumstances. So it is important that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are secured which an appropriate offer is made based upon your:
Capability to pay;
The OIC application requires you to describe your monetary scenario in detail, so before you proceed you must want to make a full and complete disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Scranton Pennsylvania
Before the IRS will consider your offer, you should: (1) submit all income tax return you are lawfully required to submit, (2) make all required estimated tax payments for the existing year, and (3) make all needed federal tax deposits for the existing quarter if you are an entrepreneur with employees. In addition, you are not eligible if you remain in an open bankruptcy proceeding.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a lump amount or through an installment contract and have exhausted their search for other payment plans. To get approved for the OIC program, taxpayers must be able to show and prove that their tax quantity can not be settled under either a swelling amount or installation agreement for beginners.
All other payment alternatives need to be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully jeopardize a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether or not the assessed tax is right.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the total amount you owe should be higher than the amount of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the amount owed could be collected, however you have a financial challenge or other special situations 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 notification of approval.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Generally, the IRS will not accept an offer if you can pay your tax debt in full through an installment contract or a swelling amount.
It is necessary to note that penalties and interest will continue to accumulate during the offer examination procedure.