By Tony Schrementi
"What is that", you say? OIC stands for Offer in Compromise, and if you find yourself in the unenviable position of owing the Internal Revenue Service for back taxes that are still due and payable, then this may well be your best option.
Now the next question is, are you good candidate for an Offer in Compromise?
Whether you are an individual or a business, and you do not have the wherewithal, i.e. income, assets, or the means to pay your debt to the IRS right now or in the not too distant future, you could be a bona fide candidate for an Offer in Compromise.
What the program is designed to do is allow a taxpayer to offer an amount for settlement that is less than the undisputed total tax liability. The Internal Revenue Service will approve an OIC when what is offered is the most they can expect to collect in a reasonable time period.
Each case is evaluated on the unique facts and circumstances surrounding it. Strong consideration is given to factors such as:
1. Ability to pay.
2. The equity a taxpayer has in their assets.
3. Present and any possible future income.
4. Present and future expenses.
5. The likelihood of a change in the taxpayers circumstances for better or worse.
6. Whether the offer is in the best interests of the Government.
An Offer in Compromise is an agreement that has to be reached between the taxpayer and the IRS. Since it settles the tax liability for less than the full amount owed, without the right set of facts and circumstances an offer will not be accepted if they think the debt can be paid in full or through one of their installment payment agreements.
The Internal Revenue Service may accept an OIC based on the following three grounds:
1. Doubt of Collectibility - reasonable doubt that the taxpayer would ever be able to pay the full amount owed.
2. Doubt as to the Liability - there exists a reasonable doubt that the tax that's been assessed is correct.
3. Effective tax Administration - simply put the tax is correct and there may even be some potential to collect the full amount owed, but extenuating circumstances exist that would allow the IRS to consider an OIC. To qualify the applicant would have to demonstrate that the collection of the full amount would cause an undue hardship or would somehow be unfair and inequitable.
There you have it. Now you know what the Internal Revenue Service takes into consideration to qualify for an OIC. As you can see, it could be tricky and no place to go it alone, but with the proper representation, it could be just what the doctor ordered.
To find out if you meet the qualifications for an Offer in Compromise, you can get more information at http://www.besttaxrelief.info and maybe you'll be spelling tax relief... OIC, too!
Article Source: http://EzineArticles.com/?expert=Tony_Schrementi
How Do You Spell Tax Relief? OIC, That's How
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