OIC is offer in compromise, Its an agreement between you (the taxpayer) and the IRS to settles a tax debt for less than the full amount owed. This applies to all taxes, including any interest, penalties, or additional amounts arising under the Internal Revenue Code.
The ultimate goal to draft a compromise that is in the best interest of both the taxpayer and the IRS. We make an appropriate offer based on what the IRS considers your true ability to pay. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship.
The IRS considers your unique set of facts and circumstances. So ATC’s goal is that an appropriate offer is made so that your interests are protected. Before making an offer we analysis your:
Ability to pay;
Eligibility For An Offer In Compromise
Before the IRS will consider your offer, you must:
(1) File all tax returns you are legally required to file.
(2) Make all required estimated tax payments for the current year.
(3) Make all required federal tax deposits for the current quarter if you are a business owner with employees.
In addition, you are not eligible if you are in an open bankruptcy proceeding.
The IRS may legally compromise a tax liability for one of the following reasons:
Doubt As To Liability: There is doubt as to whether or not the assessed tax is correct.
Doubt As To Collectability: There is the doubt that you could ever pay the full amount of the tax owed. In these cases, the total amount you owe must be greater than the sum of your assets and future income.
Promote Effective Tax Administration: There is no doubt that the assessed tax is correct and no doubt that the amount owed could be collected, but you have an economic hardship or other special circumstances which may allow the IRS to accept less than the balance due.
Lump Sum Cash: Must be paid within 5 or fewer installments within 5 or fewer months from notice of acceptance.
Short Term Periodic Payment: Must be paid within 24 months (2 years) from the date the IRS receives the OIC.
Generally, the IRS will not accept an offer if you can pay your tax debt in full through an installment agreement or a lump sum.
It is important to note that penalties and interest will continue to accrue during the offer evaluation process.