What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in West Allis WI 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, including 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 total you owe. It offers eligible taxpayers with a path towards settling their tax debt and getting a “fresh start.” The ultimate goal is a compromise that matches the best interest of both the taxpayer and the IRS. To be considered, generally you need to make a suitable deal based on what the IRS considers your true ability to pay. It might be a legitimate alternative if you can’t pay your full tax liability, or doing so develops a financial difficulty.
A common misconception or understanding 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 obtain a lower settlement of your tax debt, these advertisements offer an incorrect understanding that the majority of deals are proper which many offers will be accepted (even unsuitable deals).
The IRS considers your special set of facts and scenarios. So it is necessary that you have representation from an experienced tax expert, such as The Tax Attorney Network, so that your interests are safeguarded and that an appropriate offer is made based on your:
Capability to pay;
The OIC application requires you to describe your monetary circumstance in detail, so before you proceed you must want to make a full and complete disclosure in the above locations.
Are You Eligible For An Offer In Compromise in West Allis Wisconsin
Before the IRS will consider your offer, you should: (1) submit all tax returns you are lawfully required to submit, (2) make all required estimated tax payments for the existing year, and (3) make all needed federal tax deposits for the current quarter if you are an entrepreneur with workers. In addition, you are not eligible if you remain in an open personal bankruptcy proceeding.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a swelling amount or through an installation arrangement and have exhausted their search for other payment plans. 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 sum or installment agreement for starters.
All other payment options must be considered before sending 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 reasons:
Doubt As To Liability: There is doubt regarding whether or not the evaluated tax is correct.
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 must be higher than the sum of your possessions and future income.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is appropriate and no doubt that the amount owed might be collected, however you have an economic difficulty or other unique situations which may enable the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or less installments within 5 or fewer months from notice 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 not accept a deal if you can pay your tax debt completely through an installment agreement or a swelling amount.
It is important to note that penalties and interest will continue to accumulate throughout the offer examination procedure.