IRS Tax Offer in Compromise | San Diego|Flat Fee Tax Service
Updated: Jul 5, 2019
IRS Settlements - IRS Tax Offer in Compromise - San Diego An Offer in Compromise (OIC) is a tax settlement, where taxpayers can settle their tax liabilities with the IRS for less than the balance owed. The government and the taxpayer enter into a tax settlement agreement where the taxpayer agrees to pay a fixed amount and also agrees to pay all tax liabilities in full over the next five years. In exchange for this promise of compliance, the IRS will forgive all of the taxpayer’s liabilities provided they abide by the terms of the Offer in Compromise.
There are some common misconceptions about the Offer in Compromise program. Many taxpayers, inundated by the ads they have seen on television, falsely believe that they can simply negotiate with the IRS to reduce their tax liability. Unfortunately, all settlements with the IRS for assessed liabilities have to be negotiated through an Offer in Compromise where the taxpayer makes a formal settlement offer to settle their liability. OFFER IN COMPROMISE If you can’t pay your tax debt in full, or if paying it all will create a financial hardship for you, an offer in compromise (OIC) may be an option.
An OIC (also known as an offer in compromise) is an settlement agreement between you and the IRS, where the IRS agrees to accept less than the full amount you owe.
There are two main reasons the IRS may agree to accept less than the full amount you owe:
1. Doubt as to Collectability: This means you don’t have enough income or assets to pay your balance in full. 2. Effective Tax Administration: You can pay all your balance due, but it would create an economic hardship, or would be unfair or inequitable. Offer in Compromise Payment Options There are two kinds of payment options for a settlement offer — you must select one of them and include payment with your tax offer in compromise. The amount of the first and following payments will depend on the total amount you offer and which payment option you choose.
Lump Sum Offer: Generally, you'll be required to pay 20 percent of the total amount you're offering when you submit the offer. You’ll need to pay the rest in five or fewer payments, within five or fewer months of the date the IRS accepts the offer. Periodic Payment Offer: Generally, you’ll make the first payment when you submit the offer and the rest within 24 months, according to the terms of your offer.
For the IRS to accept an offer, you must file all tax returns due and be current with estimated tax payments or withholding. If you own a business and have employees, you must file all returns and be current on all your federal tax deposits. FLAT FEE TAX SERVICE, INC. CLIENTS HAVE A 96% IRS SETTLEMENT SUCCESS RATE.
PER 2016 IRS STATISTICS, THE IRS APPROVED APPROX. 42% OF THE 80,000 OFFER IN COMPROMISE SUBMISSIONS. Before you decide to submit an Offer in Compromise (offer), you should be aware of several things:
Submitting an offer doesn't guarantee the IRS will accept your offer. It starts the process of evaluating your situation, your ability to pay, and the amount you're offering. You can submit a settlement offer on taxes owed individually and for your business. Your IRS Tax Offer in Compromise may not be Processable
The IRS will use the criteria below to determine if it can process and investigate your offer. If the offer meets one of the criteria, the IRS won't process your offer and will return it to you. The IRS will send you a letter explaining why it could not process your offer and will return your application fee. Any payments you submitted with your offer will also be returned, except for criteria number seven. If your offer is not processed due to unfiled tax returns, any offer payments will be applied to the amount you owe.
The IRS will not process your settlement offer if:
1. You are currently in bankruptcy.
2. You didn't pay the application fee.
3. You did not pay the required initial payment with your offer.
4. You don't have a balance due.
5. The IRS can’t enforce your tax debts because the time the IRS has to collect has expired.
6. Your case is in the jurisdiction of the Department of Justice.
7. You have past due federal tax returns. 8. You do not dot the "i's" and cross all of the "t's" in your offer application. Taxpayers are urged to speak with a qualified tax attorney about their circumstances prior to submitting an offer in compromise. The IRS accepts less than half (50%) of the offers it receives and it is very important that taxpayers receive assistance in presenting their financials in a manner that would give them the most benefit as well as articulates reasons for the government to accept their offer. In addition, the IRS Tax Attorneys at Flat Fee Tax Service, Inc. pre-qualifies all of our offers and will only submit an IRS tax Offer in Compromise that we believe will be successful during IRS review. This is one of the many reasons that our IRS tax relief firm has such an excellent track record in the Offer in Compromise process. IF YOU ARE QUALIFIED FOR AN OFFER AND COMPROMISE, YOU WOULD BE FOOLSH NOT TO TAKE ADVANTAGE OF THIS FRESH START PROGRAM.
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