What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Torrance CA is an arrangement in 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 developing 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 settling their tax debt and getting a “fresh start.” The ultimate goal is a compromise that fits the best interest of both the taxpayer and the IRS. To be considered, typically you must make a proper deal based upon what the IRS considers your real ability to pay. It might be a genuine option if you can’t pay your complete tax liability, or doing so produces a financial challenge.
A common misconception 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 get a lower settlement of your tax debt, these advertisements provide an inaccurate perception that many deals are suitable which many deals will be accepted (even unsuitable offers).
The IRS considers your distinct set of realities and circumstances. So it is necessary that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are safeguarded and that an appropriate deal is made based upon your:
Capability to pay;
The OIC application requires you to describe your financial situation in detail, so prior to you continue you need to be willing to make a full and total disclosure in the above locations.
Are You Eligible For An Offer In Compromise in Torrance California
Before the IRS will consider your offer, you must: (1) submit all tax returns you are lawfully required to file, (2) make all required approximated tax payments for the existing year, and (3) make all needed federal tax deposits for the existing quarter if you are a business owner with workers. In addition, you are not qualified if you remain in an open insolvency case.
The OIC program is an alternative for taxpayers who are not able to pay their tax quantities in a lump sum or through an installment agreement and have tired their search for other payment arrangements. To receive the OIC program, taxpayers need to have the ability to show and prove that their tax amount can not be settled under either a swelling amount or installation contract for beginners.
All other payment choices need to be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS may legally jeopardize a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether the examined tax is proper.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the overall quantity you owe must be higher than the sum of your possessions 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, however you have an economic challenge or other special scenarios which might enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installations within 5 or less months from notification of approval.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS gets the OIC.
Usually, the IRS will decline an offer if you can pay your tax debt completely through an installation agreement or a swelling amount.
It is very important to keep in mind that penalties and interest will continue to accumulate throughout the deal assessment procedure.
Contact the Tax Attorney Network in Torrance CA Today at (855) 980-7563
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