Before you apply, you must make federal tax deposits for the current quarter and the previous two quarters. A commitment offer allows you to pay off your tax debt for less than the total amount you owe. Sometimes, the IRS will consider reaching an agreement that allows you to pay a reduced amount of what you owe in back taxes, called a commitment offer. You must convince the IRS that you can't pay what you owe and offer to pay the reduced amount in a lump sum or in short-term installments.
Under no circumstances do not lie or falsify any information to the IRS, as IRS agents have a lot of power and authority. You must provide detailed information about your financial situation on IRS Form 433-A (individuals) or Form 433-B (companies), Collection Information Statement. However, in real life, it's not that easy to get the IRS to settle a tax debt with a few cents on every dollar. You won't be able to reach a payment agreement or resolve a matter related to back taxes unless you have officially filed all of your tax returns with the IRS.
According to Ideal Tax, you must submit your offer, you must (file) all the tax returns you are legally required to file, (make all required estimated tax payments for the current year) and (make all required federal tax deposits for the current quarter) if you are a business owner with employees. Installment plans are like mortgage mortgages, but instead of paying a lender every month, you pay the IRS every month. However, taxpayers have rights and should know how to deal with the IRS if they owe back taxes. If you owe back taxes or if the IRS contacts you for any reason and you want to get more than five practical tips, contact Landmark Tax Group today for a no-obligation consultation.
To make this determination, the IRS analyzes your income and assets to determine your reasonable collection potential (RCP). You can ask the IRS to briefly stop any collection activity until you have obtained tax representation. Even if the IRS tries to collect a tax debt, the taxpayer can file collection appeals to try to stop a tax collection, garnishment, or seizure before the statute of limitations. Fortunately, the IRS sometimes reaches an agreement with those who can prove that they couldn't pay taxes because they didn't have the money, and not because they were bent on deceiving the government.
It's temporary for the IRS to review your income annually to see if your financial situation has improved. A commitment offer (OIC) is an agreement between a taxpayer and the IRS that settles the taxpayer's tax obligations for an amount less than the total amount owed.