If you’re late on your taxes or trying to pay a tax bill, you may be wondering what choices you have. Here’s a summary of five popular tax debt relief options for folks who need assistance with a national tax bill, past due taxes, tax punishment, and other issues. Find more information about Back Tax Help
Within the area of taxation, tax relief can apply to a variety of things. In general, any policy initiative, provision, or incentive that assists taxpayers in lawfully minimizing or reducing their tax responsibilities can be deemed tax relief. Popular tax incentives include tax breaks, deductions for taxes, and even booster payments or refunds. Tax relief is additionally a term frequently employed by the IRS to refer to an extension of time for individuals who live in officially recognized calamity regions or who have been affected by specific catastrophes such as storms or floods.
Tax debt relief
Tax relief has a distinct connotation in the context of tax problems. In this sense, relief refers to programs that assist taxpayers who are unable to make their tax payments or who have late or outstanding tax bills in managing, paying off, or settling their tax liabilities or back taxes. Many of the tax relief programs form a component of the IRS program that attempts to simplify and reduce the expense of debt recovery and repayment for taxpayers.
Tax relief methods
- Getting assistance from a tax relief firm: Tax relief firms often offer to assist distressed taxpayers. Some of these may be legitimately beneficial if you’re confused about the procedure or need assistance filling out documents, but be aware of offers that appear too tempting, such as claims to obtain money back or completely remove your debt.
- Penalty Reduction: If you otherwise have a clean record but are struck with an IRS penalty for not filing, you may be eligible to ask for the cancellation of the penalty and related interest through what is known as a first-time penalty abatement. To be eligible for this form of relief, you must normally fulfill certain conditions like paying prior taxes. The IRS also provides relief from penalties for good reasons, which might be useful if you’re unable to file on time due to a life event such as a significant sickness, a death in the family, or a fire or other natural disaster.
- Offer a reasonable compromise: Another alternative for tax reduction is what is known as an offer in compromise. This allows you to pay your past payments with the IRS for a lower amount than you owe. It could be a possibility if you are unable to pay your tax bill or if doing so will place you in financial difficulty. However, getting the IRS to approve a proposal in the settlement is far more difficult than getting them to approve a payment plan. The IRS approves less than half of all petitions. You should look at other choices before making an arrangement.