What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Tampa FL is a contract 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 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 eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, usually you should make an appropriate offer based upon what the IRS considers your real capability to pay. It may be a legitimate alternative if you can’t pay your complete tax liability, or doing so develops a monetary challenge.
A typical misconception or understanding thanks to ads 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 obtain a lower settlement of your tax debt, these advertisements offer an incorrect perception that the majority of offers are suitable which a lot of offers will be accepted (even unsuitable deals).
The IRS considers your unique set of facts and circumstances. 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 and that an appropriate offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your monetary scenario in detail, so before you proceed you must be willing to make a complete and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Tampa Florida
Prior to the IRS will consider your offer, you need to: (1) submit all income tax return you are lawfully required to submit, (2) make all needed approximated tax payments for the current year, and (3) make all needed federal tax deposits for the current quarter if you are a business owner with employees. In addition, you are not qualified if you are in an open insolvency proceeding.
The OIC program is an option for taxpayers who are unable to pay their tax amounts in a lump amount or through an installation arrangement 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 swelling sum or installment agreement for starters.
All other payment options need to be thought about before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may lawfully jeopardize a tax liability for one of 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 total of the tax owed. In these cases, the overall amount you owe should be greater than the amount of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is appropriate and no doubt that the amount owed might be collected, however you have an economic hardship or other special scenarios 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 receives the OIC.
Usually, the IRS will not accept a deal if you can pay your tax debt completely through an installment arrangement or a lump amount.
It is necessary to note that penalties and interest will continue to accumulate during the offer assessment process.