What Is An Offer In Compromise (OIC)?
An offer in compromise (offer) in Waukegan IL is an arrangement 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 extra amounts 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 qualified taxpayers with a course toward paying off 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 thought about, generally you must make an appropriate offer based upon what the IRS considers your true ability to pay. It may be a genuine choice if you can’t pay your full tax liability, or doing so produces a financial difficulty.
A typical misconception 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 definitely acquire a lower settlement of your tax debt, these advertisements provide an inaccurate understanding that most deals are proper which many deals will be accepted (even improper offers).
The IRS considers your special set of realities 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 protected and that a suitable deal is made based on your:
Ability to pay;
The OIC application requires you to describe your financial circumstance in detail, so prior to you continue you must want to make a full and total disclosure in the above areas.
Eligibility For An Offer In Compromise in Waukegan Illinois
Prior to the IRS will consider your deal, you need to: (1) submit all tax returns you are legally required to file, (2) make all needed estimated tax payments for the existing year, and (3) make all needed federal tax deposits for the present quarter if you are an entrepreneur with staff members. In addition, you are not qualified if you remain in an open personal bankruptcy case.
The OIC program is an option for taxpayers who are unable to pay their tax quantities in a swelling sum or through an installation agreement and have exhausted their search for other payment arrangements. To qualify for the OIC program, taxpayers must have the ability to demonstrate and show that their tax amount can not be settled under either a lump sum or installment agreement for beginners.
All other payment alternatives should be considered prior to submitting an offer in compromise. The Offer in Compromise program is not for everybody.
The IRS might lawfully compromise a tax liability for among the following reasons:
Doubt As To Liability: There is doubt as to whether or not the evaluated tax is correct.
Doubt As To Collectability: There is doubt that you could ever pay the full amount of the tax owed. In these cases, the overall amount you owe should be higher than the amount of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the examined tax is right and no doubt that the amount owed might be gathered, but you have an economic difficulty or other unique scenarios which may enable 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 notice of approval.
Short-term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Typically, the IRS will not accept an offer if you can pay your tax debt in full through an installment contract or a swelling sum.
It is necessary to keep in mind that penalties and interest will continue to accrue throughout the offer evaluation process.