What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Springfield IL is an agreement in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, consisting of any interest, penalties, or extra quantities occurring 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 provides qualified taxpayers with a course toward paying off their tax debt and getting a “fresh start.” The ultimate objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be thought about, generally you need to make a suitable deal based on what the IRS considers your real ability to pay. It may be a legitimate choice if you can’t pay your complete tax liability, or doing so develops a financial hardship.
A common misconception or understanding thanks to ads 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 definitely get a lower settlement of your tax debt, these advertisements offer an incorrect understanding that a lot of offers are appropriate and that a lot of offers will be accepted (even improper deals).
The IRS considers your unique set of truths and situations. So it is very important that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are protected and that a proper offer is made based on your:
Capability to pay;
The OIC application requires you to describe your financial scenario in detail, so prior to you continue you must want to make a complete and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Springfield Illinois
Before the IRS will consider your offer, you should: (1) submit all tax returns you are legally required to file, (2) make all needed estimated tax payments for the existing 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 qualified if you are in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are unable to pay their tax amounts in a swelling amount or through an installment agreement and have exhausted their look for other payment arrangements. To qualify for the OIC program, taxpayers must be able to show and show that their tax quantity can not be settled under either a swelling amount or installment agreement for starters.
All other payment alternatives must be thought about before submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether or not the assessed tax is appropriate.
Doubt As To Collectability: There is doubt that you might 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 earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is appropriate and no doubt that the amount owed might be collected, however you have an economic difficulty or other unique circumstances which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments within 5 or less months from notification of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Typically, the IRS will decline a deal if you can pay your tax debt completely through an installation agreement or a lump amount.
It is very important to note that penalties and interest will continue to accrue throughout the deal evaluation procedure.