What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Somerville MA is an arrangement between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This applies to all taxes, consisting of any interest, penalties, or additional quantities arising under the Internal Revenue Code.
An offer in compromise permits 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 ultimate objective is a compromise that matches the very best interest of both the taxpayer and the IRS. To be considered, normally you need to make a proper offer based on what the IRS considers your real capability to pay. It may be a genuine option if you can’t pay your full tax liability, or doing so produces a monetary hardship.
A typical myth or perception thanks to ads 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 obtain a lower settlement of your tax debt, these ads provide an inaccurate perception that most deals are appropriate and that many offers will be accepted (even improper deals).
The IRS considers your distinct set of facts and situations. So it is necessary that you have representation from a skilled tax expert, such as The Tax Attorney Network, so that your interests are safeguarded and that a proper deal is made based on your:
Ability to pay;
The OIC application requires you to describe your financial circumstance in detail, so before you continue you need to be willing to make a complete and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Somerville Massachusetts
Before the IRS will consider your offer, you need to: (1) submit all income tax return you are lawfully needed to file, (2) make all required estimated tax payments for the present year, and (3) make all needed federal tax deposits for the present quarter if you are an entrepreneur with staff members. 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 plans. To qualify for the OIC program, taxpayers need to be able to demonstrate and show that their tax amount can not be settled under either a lump amount or installation contract for beginners.
All other payment alternatives need to be thought about prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may lawfully compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is right.
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 need to be greater than the sum of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is appropriate and no doubt that the quantity owed could be collected, but you have an economic hardship or other unique circumstances which may enable 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 acceptance.
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 an offer if you can pay your tax debt in full through an installment agreement or a swelling sum.
It is important to note that penalties and interest will continue to accrue throughout the offer evaluation process.