What Is An Offer In Compromise (OIC)?
An offer in compromise (deal) in Woonsocket RI is an arrangement in between you (the taxpayer) and the IRS that settles a tax debt for less than the total owed. This applies to all taxes, including any interest, penalties, or additional amounts arising 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 eligible taxpayers with a path towards paying off their tax debt and getting a “fresh start.” The supreme objective is a compromise that fits the best interest of both the taxpayer and the IRS. To be thought about, normally you should make a proper deal based upon what the IRS considers your real ability to pay. It might be a genuine option if you can’t pay your complete tax liability, or doing so develops a monetary challenge.
A common myth or perception thanks to advertisements is the impression that taxpayers can quickly 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 perception that many deals are appropriate and that most offers will be accepted (even inappropriate deals).
The IRS considers your distinct set of realities and situations. So it is very important that you have representation from a skilled tax professional, such as The Tax Attorney Network, so that your interests are protected and that a suitable offer is made based on your:
Ability to pay;
The OIC application requires you to describe your financial situation in detail, so before you proceed you need to be willing to make a full and complete disclosure in the above areas.
Eligibility For An Offer In Compromise in Woonsocket Rhode Island
Prior to the IRS will consider your offer, you must: (1) submit all income tax return you are lawfully needed to file, (2) make all required estimated tax payments for the present year, and (3) make all needed federal tax deposits for the present quarter if you are a business owner with employees. In addition, you are not qualified if you are in an open insolvency case.
The OIC program is an option for taxpayers who are not able to pay their tax amounts in a lump amount or through an installation contract and have exhausted their search for other payment arrangements. To receive the OIC program, taxpayers should be able to show and prove that their tax quantity can not be settled under either a swelling amount or installation arrangement for starters.
All other payment choices should be considered prior to sending an offer in compromise. The Offer in Compromise program is not for everyone.
The IRS might legally jeopardize a tax liability for among the following factors:
Doubt As To Liability: There is doubt as to whether the examined 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 quantity you owe need to be greater than the amount 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 amount owed might be collected, but you have a financial hardship or other unique circumstances which may allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installations 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.
Typically, the IRS will not accept an offer if you can pay your tax debt in full through an installment agreement or a swelling amount.
It is very important to keep in mind that penalties and interest will continue to accumulate during the offer examination procedure.
Contact the Tax Attorney Network in Woonsocket RI Today at (855) 980-7563
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