What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Seattle WA 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 additional amounts developing 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 qualified taxpayers with a path towards settling their tax debt and getting a “fresh start.” The supreme goal is a compromise that fits the very best interest of both the taxpayer and the IRS. To be considered, generally you should make a suitable deal based on what the IRS considers your real ability to pay. It may be a genuine choice if you can’t pay your complete tax liability, or doing so produces a monetary challenge.
A common misconception or perception thanks to advertisements 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 obtain a lower settlement of your tax debt, these advertisements supply an inaccurate understanding that the majority of deals are suitable which a lot of offers will be accepted (even improper offers).
The IRS considers your distinct set of truths and situations. So it is essential that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are safeguarded which a proper deal is made based upon your:
Ability to pay;
The OIC application needs you to explain your financial circumstance in detail, so prior to you proceed you need to want to make a full and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Seattle Washington
Prior to the IRS will consider your deal, you must: (1) file all income tax return you are lawfully required to submit, (2) make all needed estimated tax payments for the present year, and (3) make all required federal tax deposits for the existing quarter if you are a business owner with workers. In addition, you are not eligible if you remain in an open bankruptcy case.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a lump amount or through an installment agreement and have tired their look for other payment plans. To receive the OIC program, taxpayers must have the ability to demonstrate and prove that their tax quantity can not be settled under either a lump amount or installation agreement for beginners.
All other payment options need to be thought about before sending an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether or not the examined tax is appropriate.
Doubt As To Collectability: There is doubt that you might ever pay the total of the tax owed. In these cases, the total amount you owe must be greater than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is proper and no doubt that the quantity owed might be gathered, but you have a financial hardship 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 gets the OIC.
Generally, the IRS will not accept a deal if you can pay your tax debt completely through an installment agreement or a swelling amount.
It is essential to note that penalties and interest will continue to accrue during the offer evaluation procedure.