You may have heard that you can negotiate a settlement with the IRS for a lower amount than you have owed. But IRS will not let you go easily. However, only under certain circumstances, you will qualify for OIC. With the use of an OIC, you can work out a deal with the IRS to settle your tax liability for lesser than you actually owe. There are restrictions on who can benefit from this, and you must fulfill them in order to be eligible.
Who will be eligible?
OICs are quite complicated. You should seek the advice of an experienced tax attorney near me. The IRS can accept an OIC only when the taxpayers can show that paying the complete tax bill can put them in financial trouble.
According to IRS regulations, if you are unable to pay the tax debt in full before the time given by IRS, you will qualify for the OIC. The IRS will check the ability of the taxpayers whether they can make the payment or not for determining whether they will qualify for the OIC.
They will take a look at the income, spending, and assets of the taxpayers for calculating their ability to make the payment. By this time, you would have understood that you need to provide all the verifiable information related to your retirement plans, assets, available credit, etc. Make sure that you have submitted all necessary tax returns for the last six years minimum before submitting your offer.
Additionally, you must pay all of your yearly expected tax payments. If you are running a business, it is important to make a federal tax deposit. This has to be done before you submit the offer. Post doing this, you must proceed with filing and payment compliance. You must then come up with an offer amount proposal.