What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Topeka KS is an arrangement in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, including any interest, penalties, or additional quantities emerging 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 toward 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 thought about, usually you need to make a proper deal based on what the IRS considers your true capability to pay. It may be a genuine alternative if you can’t pay your complete tax liability, or doing so develops a financial difficulty.
A common misconception or perception thanks to ads is the impression that taxpayers can easily settle their tax liability “for pennies on the dollar” through the offer in compromise program. While you can certainly get a lower settlement of your tax debt, these advertisements supply an incorrect understanding that most offers are suitable and that the majority of offers will be accepted (even improper deals).
The IRS considers your special set of truths and situations. So it is very important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are secured which an appropriate offer is made based upon your:
Ability to pay;
The OIC application requires you to describe your monetary circumstance in information, so before you proceed you need to want to make a complete and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Topeka Kansas
Prior to the IRS will consider your offer, you should: (1) submit all income tax return you are legally needed 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 a company owner with employees. In addition, you are not qualified if you are in an open insolvency proceeding.
The OIC program is a choice for taxpayers who are unable to pay their tax quantities in a swelling amount or through an installment contract and have tired their search for other payment plans. 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 arrangement for beginners.
All other payment options need to be thought about before submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally compromise a tax liability for among the following factors:
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 overall amount you owe should be greater than the sum of your properties and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is correct and no doubt that the quantity owed might be gathered, however you have a financial challenge or other unique situations which may permit the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installations 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.
Generally, the IRS will decline a deal if you can pay your tax debt completely through an installment agreement or a swelling amount.
It is important to keep in mind that penalties and interest will continue to accrue during the offer examination process.