OFFER IN COMPROMISE-Freedom from the IRS
Offer in Compromise (or OIC) program is an internal IRS program which allows any qualified individual or business with an unpaid tax liability to settle their outstanding obligation for an amount MUCH less than what the actual balance is. It will 100% clear up the liability and you will owe NOTHING to the Internal Revenue Service. Can you imagine that the IRS settled for pennies on the DOLLARS. I have seen it; I have done it.
There are requirement that have meet in order to be eligible. When you talk to the experts at the Law Offices of Matthew T. Desrochers we will determine if you are eligible for this program.
Conditions for Filing An Offer in Compromise
There are three conditions that exist before an installment agreement will be accepted. First ALL tax returns MUST be filed with the IRS before an Offer in Compromise will even be reviewed for consideration. Second there must be some “DOUBT AS TO COLLECTABILITY”. The taxpayer must show to the Internal Review Service that there is some doubt as to their ability to collect the balance from the tax payer. This directly relates to your ability to pay and your current list of assets. Third you must pay 20% of your offer amount upfront and it is not refundable.
It is our job to show the Internal Revenue Service that the taxpayer will never be able to pay the balance regardless of the timeframe.
Once the analysis is complete the specific IRS form 656 and 433A are completed and reviewed by myself personally and submitted to the IRS for consideration.
Within several months the IRS will review and consider your proposal. During this time; any and all collection activity ceases and no further collection activity is pursued.
The doubt as to collectability (DATC) is the most common basis for the offer and its the most common reason for acceptance with the IRS.
A complete financial statement will have to be presented and many other documents in order for the IRS to consider you as a possible candidate for the OIC program. This includes but is not limited to paystubs, tax returns, bank statement, deeds, mortgage statements, car loan statements, divorce decrees, profit and loss statement, life insurance or wills or trusts.
If you owe less than this amount offers in compromise formulas, you're not eligible for the program offer in compromise. However, this program can be a very great deal for people who owe a huge sum of tax debt. The amount reduced can still be a great help, but still less than the total debt.
If the IRS has already levied or lien has been placed your property, then that levy and/or lien will remain in place until the tax debt has been fully satisfied in accordance to the offer in compromise. Once the debt is paid, then you can request the IRS release the lien.
Ten years ago in 2006 the IRS has amended their policies regarding a cash settlement offer. When planning to file an offer in compromise and making a cash settlement offer, you are MUST to send in 20% of their debt payment plus $186 at the time of filing. If the filing fee is not included with the offer, then it will be rejected. The IRS has up to 2 years to determine if they accept or reject your offer. If they don't respond within 2 years, then the offer is automatically accepted.
Irrespective, of the direction you take, it only makes sense to get someone that understands the process, the requirements, formulas to put this together and properly present to the IRS. Call the professional at the Law Offices of Matthew T. Desrochers, P.C.
If you would like to learn more and/or receive assistance with foreclosure, Mortgage Audit, loan modification, bankruptcy or debt settlement, please contact us at (781) 315-4566.
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