What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Woburn MA is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. This uses to all taxes, including any interest, penalties, or additional amounts occurring under the Internal Revenue Code.
An offer in compromise permits you to settle your tax debt for less than the full amount you owe. It offers eligible taxpayers with a path towards settling their tax debt and getting a “fresh start.” The supreme objective is a compromise that fits the very best interest of both the taxpayer and the IRS. To be considered, typically you need to make a suitable offer based upon what the IRS considers your real capability to pay. It might be a legitimate alternative if you can’t pay your complete tax liability, or doing so produces a monetary difficulty.
A typical myth or understanding thanks to advertisements is the impression that taxpayers can easily settle their tax liability “for cents on the dollar” through the offer in compromise program. While you can definitely get a lower settlement of your tax debt, these ads provide an inaccurate understanding that many offers are appropriate and that the majority of deals will be accepted (even unsuitable deals).
The IRS considers your special set of facts and scenarios. So it is important that you have representation from a knowledgeable tax expert, such as The Tax Attorney Network, so that your interests are protected and that a proper deal is made based on your:
Capability to pay;
The OIC application needs you to explain your monetary situation in information, so prior to you proceed you need to be willing to make a full and total disclosure in the above locations.
Eligibility For An Offer In Compromise in Woburn Massachusetts
Before the IRS will consider your deal, you should: (1) submit all income tax return you are lawfully required to submit, (2) make all required estimated tax payments for the current year, and (3) make all needed federal tax deposits for the present quarter if you are a company owner with workers. In addition, you are not qualified if you remain in an open personal bankruptcy case.
The OIC program is an alternative for taxpayers who are unable to pay their tax amounts in a lump sum or through an installment contract and have actually tired their look for other payment plans. To receive the OIC program, taxpayers must be able to demonstrate and show that their tax quantity can not be settled under either a lump amount or installment arrangement for starters.
All other payment choices need to be thought about prior to sending 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 the examined tax is right.
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 must be greater than the sum of your properties and future earnings.
Promote Effective Tax Administration: There is no doubt that the evaluated tax is proper and no doubt that the amount owed could be collected, but you have a financial difficulty or other special situations which might permit 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 acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Typically, the IRS will decline an offer if you can pay your tax debt in full through an installment arrangement or a lump amount.
It is important to note that penalties and interest will continue to accrue during the deal assessment process.