We've all heard the claims of authority to settle tax debts for "pennies on the dollar." Sounds good, but it really works? It may seem too good to be true, the truth is that this is not for everyone. But for those who qualify, you can save real life.
An offer of compromise, or OIC, is an agreement with the IRS allows an individual or company to negotiate a settlement amount that is less than the total amount due. It is important to realize that the Treasury believes that this method of last resort, less than 1% of all accounts balance is resolved in this way. The IRS prefer payment in installments that will result in the ultimate collection of the entire balance due. However, the OCI option is there and if you meet one of the following conditions, it might work for you.
There is three conditions for a taxpayer is eligible to request the OIC:
1. Disclaimer Doubt – asks the IRS has made a mistake and do not have money, they tell you to do.
2. Doubts about the recovery – Ensure that the debtor can not say that the IRS money or property to pay the debt, and never will. The IRS will calculate assets available through a formula to determine the payment amount, such as:
Settlement Amount = 60 months of disposable income + equity of all its assets.
3. The effective tax administration – you ask for "special circumstances" because the recovery of the debt could create undue hardship and would be unfair. This is the most common option for elderly or disabled taxpayers.
Recent tax law requires that persons seeking an order to submit a requested $ 150, with a deposit of 20% of the proposed settlement offer. These fees are not refundable, even if it rejects his offer, IRS keeps the money. There are exceptions to the requirement of charge. If you qualify for an exemption for low income, or if you claim responsibility doubt, you not have to pay. The IRS has two years to decide on its offer.
If the OIC is not accepted by the IRS, it is essential to remain in compliance with the declaration and payment of all taxes for a period of five years or until the amount offered is paid in full, which is longer. Otherwise, you may be in breach of its agreement with the OIC.
A great past, the tax debt owed something can be intimidating, after all, this is not only a boring collection agency harassing you, the Federal government. However, it is important to address the challenge of taking a deep breath and consider your options carefully and realistically. If you belong to one category described above, an offer of compromise with the IRS may be the thing to make the burden on their shoulders.
About the Author:
For more information about offers in compromise or other problems with the IRS please visit IRS Problems Resolved.
Article Source: ArticlesBase.com – An Offer in Compromise – It Could Be Your Answer
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