IRS has the standards for you to have a clean sheet on the tax and receive the discount. The main standard is the offers in compromise also known as OIC. IRS considers the amount of taxpayer equal or accepts it even if it is less. Learn about some of the facts you need to know about OIC.
Top 5 Things to Understand Offers in Compromise
Everyone wants to have the tax bill reduced but it is not possible for everyone. It is not so easy to qualify for the offers in compromise so you have to know that considerations and show one of the conditions to the IRS for acceptance. The conditions include the tax bill either present or for the future. Sometimes the tax bill can cause hardship so you have to show the full tax bill payment. You can refer to the tool online to have the prequalification round to see if you are willing to compromise on any of these conditions.
OIC includes the formal process so you cannot expect that you will just ask for the OIC and you will get it. First of all, you have to fill the 656 form and pay the feel which is about $160. Attach the fee with the form and submit it to IRS office. You have to provide complete financial information on the form whether business or individual. If you are married, then you have to mention the information regarding the spouse as well. Every little detail needs to be written in the form of proper evaluation and acceptance.
You also have to attach the financial forms such as book-keeping records, pay stubs, registrations and more items as a proof. It can be a long process so make sure to get it done on time if you want to save money on taxes. If you do not go through this process of the offer in compromise then know that you won’t be getting the cut down on the taxes so, for something beneficial, you have to go through this process.
It depends upon your financial information mentioned in the form for the amount you will get back. The total monthly income and net value are calculated in order to find out the real return for your taxes. Follow all the instructions on the form to calculate and give a view to the IRS about your calculations through the form.
If the offer in compromise form is rejected then you are able to apply again. Maybe a small mistake might have failed your attempt but there is not any limitation for the application submission. There can be two main reasons for the rejection such as offer is too low or if you have convicted any serious crime. If you do not find any logic behind the rejection, then you are able to report your complaint to the IRS in order to find out the actual reason for it.
If you an accountant with you during the process of offers in compromise then it can work as the benefit. They know all the insights of the forms with filling them in the best way. Experts know the things which ordinary people are not aware of so it is always better to refer to the tax attorney or negotiator who can help you with getting done with the process smoothly.
To be wise in the process of the tax return, you have to work ahead of time in order to get done with it efficiently. The last-minute work always does not work so look ahead of time and hire the right person who can work with you to get the best deal out of OIC. Business owners need to be conscious of every financial detail to survive in the market and accurate accounting can play a big role in the accuracy and big returns for the company. So make sure not to overlook the OIC process and apply it before the deadline of taxes arrives this year.
