What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Watsonville CA is a contract between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This applies to all taxes, including any interest, penalties, or additional amounts occurring under the Internal Revenue Code.
An offer in compromise enables you to settle your tax debt for less than the total you owe. It offers qualified taxpayers with a course towards settling their tax debt and getting a “fresh start.” The ultimate objective is a compromise that fits the very best interest of both the taxpayer and the IRS. To be thought about, typically you should make a suitable deal based upon what the IRS considers your true capability to pay. It might be a legitimate option if you can’t pay your complete tax liability, or doing so produces a financial hardship.
A typical myth or perception thanks to ads 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 supply an incorrect understanding that a lot of offers are suitable which a lot of offers will be accepted (even inappropriate deals).
The IRS considers your unique set of realities and circumstances. So it is essential that you have representation from an experienced tax professional, such as The Tax Attorney Network, so that your interests are safeguarded which a suitable offer is made based on your:
Capability to pay;
The OIC application needs you to describe your financial scenario in detail, so prior to you proceed you must be willing to make a complete and total disclosure in the above areas.
Are You Eligible For An Offer In Compromise in Watsonville California
Before the IRS will consider your offer, you should: (1) file all income tax return you are legally required to file, (2) make all needed estimated tax payments for the existing year, and (3) make all required 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 bankruptcy case.
The OIC program is an option for taxpayers who are not able to pay their tax quantities in a lump amount or through an installation agreement and have exhausted their look for other payment plans. To receive the OIC program, taxpayers need to be able to demonstrate and show that their tax quantity can not be settled under either a lump amount or installment agreement for beginners.
All other payment alternatives should be considered before sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might lawfully compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt regarding whether the assessed tax is proper.
Doubt As To Collectability: There is doubt that you could ever pay the total of the tax owed. In these cases, the total amount you owe should be greater than the sum 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 quantity owed could be gathered, but you have an economic difficulty 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 installments within 5 or fewer 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.
Normally, the IRS will decline a deal if you can pay your tax debt in full through an installment agreement or a swelling amount.
It is important to note that penalties and interest will continue to accrue throughout the deal assessment process.
Contact the Tax Attorney Network in Watsonville CA Today at (855) 980-7563
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