What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Sugar Land TX is an agreement 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 amounts developing under the Internal Revenue Code.
An offer in compromise allows you to settle your tax debt for less than the total you owe. It offers eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The supreme objective is a compromise that suits the best interest of both the taxpayer and the IRS. To be thought about, usually you need to make an appropriate deal based upon what the IRS considers your true ability to pay. It might be a genuine choice if you can’t pay your full tax liability, or doing so produces a financial challenge.
A typical misconception or understanding 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 definitely get a lower settlement of your tax debt, these advertisements offer an incorrect perception that most deals are appropriate which many deals will be accepted (even inappropriate deals).
The IRS considers your distinct set of truths and scenarios. So it is important that you have representation from a knowledgeable tax professional, such as The Tax Attorney Network, so that your interests are safeguarded and that a suitable deal is made based on your:
Capability to pay;
The OIC application needs you to explain your financial scenario in detail, so before you proceed you should want to make a full and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Sugar Land Texas
Before the IRS will consider your deal, you should: (1) file all tax returns you are lawfully required to submit, (2) make all required estimated tax payments for the present year, and (3) make all needed federal tax deposits for the existing quarter if you are an entrepreneur with staff members. In addition, you are not eligible if you remain in an open personal bankruptcy proceeding.
The OIC program is an option for taxpayers who are not able to pay their tax amounts in a lump sum or through an installment contract and have tired their search for other payment plans. To qualify for the OIC program, taxpayers need to have the ability to demonstrate and prove that their tax amount can not be settled under either a lump amount or installation agreement for beginners.
All other payment choices need to be thought about before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might legally jeopardize a tax liability for one of the following factors:
Doubt As To Liability: There is doubt as to whether or not the evaluated tax is right.
Doubt As To Collectability: There is doubt that you might ever pay the full amount of the tax owed. In these cases, the total quantity you owe must be greater than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is correct and no doubt that the amount owed could be gathered, but you have a financial hardship or other unique situations which might permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or less 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.
Typically, the IRS will decline an offer if you can pay your tax debt in full through an installation agreement or a lump amount.
It is very important to note that penalties and interest will continue to accumulate throughout the offer evaluation process.