What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Tucson AZ is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This uses to all taxes, consisting of any interest, penalties, or extra quantities arising under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the total you owe. It supplies eligible taxpayers with a course toward settling their tax debt and getting a “fresh start.” The ultimate objective is a compromise that matches the best interest of both the taxpayer and the IRS. To be thought about, normally you need to make an appropriate offer based on what the IRS considers your true ability to pay. It may be a genuine alternative if you can’t pay your complete tax liability, or doing so creates a financial hardship.
A common myth or understanding thanks to advertisements 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 certainly obtain a lower settlement of your tax debt, these ads offer an inaccurate understanding that many deals are suitable which many deals will be accepted (even improper offers).
The IRS considers your unique set of facts and situations. So it is necessary that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are secured and that a suitable offer is made based upon your:
Ability to pay;
The OIC application needs you to describe your financial scenario in information, so prior to you proceed you should be willing to make a full and complete disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Tucson Arizona
Before the IRS will consider your offer, you must: (1) file all tax returns you are lawfully required to submit, (2) make all required approximated tax payments for the existing year, and (3) make all required federal tax deposits for the current quarter if you are a company owner with workers. In addition, you are not eligible if you remain in an open bankruptcy proceeding.
The OIC program is an option for taxpayers who are not able to pay their tax quantities in a lump sum or through an installation agreement and have exhausted their look for other payment arrangements. To qualify for the OIC program, taxpayers should be able to demonstrate and prove that their tax amount can not be settled under either a lump amount or installation arrangement for starters.
All other payment options must be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS may legally compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt regarding whether the assessed 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 overall amount you owe should be greater than the amount of your assets and future earnings.
Promote Effective Tax Administration: There is no doubt that the assessed tax is proper 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 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.
Generally, the IRS will decline a deal if you can pay your tax debt in full through an installation arrangement or a swelling sum.
It is necessary to keep in mind that penalties and interest will continue to accrue throughout the offer assessment procedure.