Applying for an OIC
An offer in compromise allows you to relieve any tax liability for a lower sum than the total amount owed. It could be a viable choice if you cannot pay your entire tax debt or if doing so would cause financial hardship. We analyze your unique information and circumstances, such as your ability to repay your debt and your income, costs, and asset equity.
The IRS typically accepts offers in compromise where the amount you provide is the highest the IRS can expect to collect within a time frame. Before submitting a compromise offer, consider all available payment possibilities. The Offer in Compromise program is not for everyone, meaning you should check the credentials of any tax specialist you hire to assist you in submitting an offer.
Who Is Eligible
You are entitled to apply for an Offer in Compromise if you meet the following criteria:
– You filed all applicable tax filings and made all required anticipated payments.
– You are not currently involved in a bankruptcy process
– You have a valid extension for a current-year return (if applying for the current year)
Select a Payment Option
Be aware that initiating your initial payment varies depending on your offer and the payment method you select. You can include an initial fee of 20% of the total offer amount for lump sum cash payments with your application. If we accept your offer, we will send you a formal confirmation. You must pay any leftover debt on the deal in five or fewer installments. If you plan to make periodic payments, you should include your initial fee with your application. Continue to pay the outstanding monthly payment while the IRS reviews your offer. If the IRS accepts your offer, continue to pay regularly until the debt is paid in full.
OICs can get complicated.
Even if you qualify for an OIC, you must still be able to pay the amount required to satisfy the tax bill. That amount is also known as the “offer amount.” This sum is frequently based on the worth of your assets. For example, people who have built up equity in their house or 401(k) may be required to pay the IRS their “net equity” in these assets as part of their offer amount, also known as foreclosure.
The offer amount also includes what the IRS will receive monthly payments over a set period. The duration of time depends on various things, including how long the IRS has to collect and the payment method you use to pay the offer amount.
Long-term Payment Plan (Installment Agreement)
The IRS is authorized by law to levy fines on taxpayers who fail to submit a tax return or fail to pay taxes owed by the deadline. The remainder is subject to interest and a monthly late payment penalty if you cannot pay your tax liability by the original filing deadline. There is also a penalty for failing to file a tax return, so you should file in time even if you can’t pay your debt in full. It is always to your best advantage to pay in full as soon as possible to avoid additional fees. In addition, filing for a monthly payment plan can help avoid incurring other interest, penalties, and problems when applying for loans.
Getting Professional Help
A skilled tax representative may typically be of great assistance in arranging the best feasible compromise or installment agreement. However, you should always ensure that IRS tax disputes and IRS collections resolutions are the foundations of their activities. Many attorneys and Certified Public Accountants (CPAs) undertake tax planning but rarely interact with clients. Great tax consultants will take time for you and take time to understand your situation. Idealtax.com helps with tax debt where others can’t. Get in touch with them today!
