Tax Debt Relief: IRS Forgiveness Program
TABLE OF CONTENTS:
What Is The IRS Forgiveness Program? 2023 Updates
A Common Misconception About The IRS Tax Relief Program
Who Might Benefit From An IRS Tax Debt Relief Program?
The Painful Truth
What Are The Eligibility Requirements For A Debt Forgiveness Program?
Benefits Of The IRS Forgiveness Program
How A Certified Specialist Can Help
What Are Some Of The IRS Debt Forgiveness Programs For Tax Debt Relief?
Frequently Asked Questions
What is the IRS Forgiveness Program? 2023 Updates
Certain taxpayers in the United States who cannot afford to pay their tax liability due to financial hardship may qualify for tax debt relief under the IRS Forgiveness Program.
If you’re reading this article, then you’re here to find out what tax forgiveness is and if you can get IRS forgiveness for your liabilities. The good news is that the IRS offers several debt forgiveness programs designed to help you genuinely achieve tax forgiveness.
A Common Misconception About The IRS Tax Relief Program
Due to the financial stress back taxes can cause for certain taxpayers, the IRS is often the last place where many people experiencing the impact of tax debt think they’ll get the help they deserve.
However, the IRS is more than willing to work with you, no matter how old your debt is. IRS tax debt forgiveness is more viable than people think, and a simple lump-sum payment combined with an installment agreement can already solve a significant part of your problems.
Who Might Benefit From An IRS Tax Debt Relief Program?
The taxpayers who may benefit from an IRS tax debt relief program are those who are facing tax problems and cannot afford to pay the tax liabilities owed to the IRS. Most common tax issues mentioned in the fresh start initiative include overstated or understated income on tax forms or a failure to take all deductions into account.
All of these factors can result in federal tax liens, levies on your assets, and IRS debt. If you’ve made a significant mistake in your tax filing, you run the risk of being audited.
Tax help can help reduce your tax liability or tax burden. In exceptional cases, certain rules prevent the IRS from putting wage garnishments on a person’s bank account. Keep in mind that levies never come without notice, and if you receive a letter, you should reach out to one of our tax pros immediately.
Qualifications may differ depending on the location of the IRS office, and our employees can help you with the navigation of IRS notices.
The Painful Truth
In short, in the standard case of taxes owed, you will have to pay taxes through a credit or debit card, even if you get debt forgiveness. If you have significant debt with the IRS, there are different ways to funnel your liabilities back to the IRS. In addition, a tax professional might be able to provide services to you for getting into the IRS debt forgiveness program to get a fresh start.
Key Takeaways:
- Taxpayers who cannot afford to pay their tax liability without causing significant financial hardship may qualify for tax debt relief through the IRS Debt Forgiveness Program.
- The IRS Fresh Start Program allows for tax forgiveness credits against your earned money to help reduce the overall amount you need to pay yearly.
- The main forms of tax debt relief through the IRS Debt Forgiveness program include installment agreements, innocent spouse relief, offer in compromise, and currently not-collectible status.
What are the eligibility requirements for a debt forgiveness program?
Eligibility for the debt relief program through an IRS debt forgiveness program is considered based on your total income and expenses. Debt forgiveness is only possible when the IRS is causing taxpayers financial hardship.
The tax professionals at Ideal Tax are here to help you navigate the complicated, red-tape-filled, and overwhelming process of getting tax debt forgiveness, and provide details or information where necessary. Our specialists are here to help you solve your tax problems by getting tax debt lowered through the IRS debt forgiveness program and filing all your tax returns once and for all.
Benefits Of The IRS Forgiveness Program
You might be looking at your tax status and thinking: what am I getting myself into? More than often, individual taxpayers, family businesses, employers, or just a company can get behind on different types of payments, including tax collection. Depending on the state you live in and the local laws applicable, you could be racking up penalties, fees, and interest.
Eligibility requirements sound very strict, but it all boils down to one thing: The IRS is not allowed to cause financial hardship. So, whether you run a business, or you’re in self-employment, become a business owner, or are an individual taxpayer, you might be eligible if you feel like you cannot provide for your family. In severe cases of economic hardship, you might even be able to request an OIC.
Getting tax forgiveness helps you get organized with your taxes to avoid tax penalties in the future. For example, if you’re behind on taxes, you could hire CPAs on a freelance basis to get you back on track. In addition, as soon as you reach a solution, you will stop incurring fees on your tax return. CPAs always have a certification for their skills and exercise the power of attorney to file a proposal. Once you have your finances in order, it will also get easier to optimize tax-free savings, increase your credit score, reduce credit amounts, and file for deductions and tax-exemptions on your tax returns.
While the federal government does have options for tax assistance, they are not someone you should look for to give you information about local state tax laws, or make it too easy for you to claim a tax refund. Your finances are part of their income, and while they might share some tax tips, a tax professional offers a bigger chance of getting deductions and exemptions on your return/filing.
How A Certified Specialist Can Help
A certified specialist at Ideal Tax can help you sort through the debt forgiveness options best suited to your situation to help you solve your tax problems once and for all. A certified CPA can help prevent tax penalties for late filing. In addition, they’ll be able to more effectively get your refund, keep your tax record file up-to-date, and update your tax details. If you’re thinking: I don’t want to update my information, you’re not the only one. Businesses and individual taxpayers often let CPAs exercise the power of attorney to change statements, back taxes, and tax details.
Moreover, late filings can cause problems with other deductions like itemized deductions. These include the amounts you paid for state income or sales taxes, real estate taxes, and more. You are not only incurring debt, but you’re also missing out on regular deductions from your tax bill.
Our team offers a free initial consultation to create proper guidance and will help you find the optimal solution to your tax problem. A tax consultant can give a proper instructions overview, or manage everything for your tax return to reach the best possible resolution. In most cases, an employee will request to pay a lump sum payment to the IRS and the client can then repay the remaining amount in installments.
What Are Some Of The IRS Debt Forgiveness Programs For Tax Debt Relief?
Several different tax debt relief options are available to taxpayers, but their eligibility for each debt forgiveness program is based on the circumstances surrounding their unpaid debt. Here are a few forgiveness and relief options recommended by our tax experts.
Installment Agreement Payment Plan
An installment agreement makes it possible for you to pay down your tax debt in monthly payments if you cannot afford to pay the total amount. An installment agreement also stops your tax bill from incurring additional fees and penalties.
Optionally, you might qualify for the IRS penalty waiver under the forgiveness plan. When you want to claim a refund and request penalty abatement, you will have to fill in form 843.
The most common repayment period is a payment plan over 72 months, and this option is only available if you need to pay back more than $50,000 in combined debt, interest, and penalties.
Offer In Compromise
The offer in compromise (OIC) is a settlement option that qualifies you to pay far less than the amount you owe to the IRS, therefore directly lowering your tax debt. The offer in compromise is a popular solution for individuals who are in debt with the IRS. However, it is also the least common of all programs under the fresh start program that is only approved in severe cases.
Currently Not Collectible Status
Currently Not Collectible is a relief program that is designed to function as a clean slate program for taxpayers who can prove that they cannot pay back their taxes. If approved, the taxpayer’s accounts will be flagged with non-collectible status and the IRS will not be able to pursue collection or levy their assets or property.
Taxpayers qualifying for the IRS fresh start program is not automatic; just because you have met the requirements doesn’t mean you’ll be approved for IRS debt forgiveness.
In a nutshell
Owing to the IRS for delinquent liabilities is never a fun experience for anyone, but that doesn’t mean that you have to stress and worry. For a taxpayer to get a clean slate, there are many different IRS forgiveness and assistance programs out there to help you get out of the overwhelming tax debt you’re facing.
Understand, though, that the last thing you want to do is avoid the IRS because they can garnish your wages, withhold your future tax refunds, and more. You can always contact us at Ideal Tax if you require assistance filing your income tax return with the federal government. Our tax pros are aware of the local laws of your state and can provide the best assistance for your refund.
If you require more information, you can call us to find out how we can take the stress and worry away and settle your tax debt relief today! Schedule your free call today to see whether you qualify for the IRS’s tax program.
Frequently Asked Questions
Who is eligible for an IRS tax relief program?
To be considered eligible for the IRS Tax Forgiveness Program, taxpayers must:
1. No history of late payments to the IRS.
2. Prove that paying your tax liability would cause financial hardship.
3. Being up to date with the current tax year.
What is the process for applying for tax debt relief?
Talking to the entity you owe money to is the first step in asking for forgiveness. To get a loan modification, you’ll need to provide proof of your current financial situation and the reasons you can’t afford to make the loan payments. Once you have submitted your paperwork, the organization will review it and make a decision on your debt forgiveness request. If they do decide to cancel your debt, they will write you a letter explaining their decision and the amount you’ve been forgiven.
How long does it take to receive a decision from the IRS?
Several factors can impact how long it takes to receive a decision about your tax debt relief request, such as the nature of the case, the jurisdiction in which it is filed, the number of litigants, and the volume of evidence. However, it might take anywhere from a few months to a few years for a final judgment to be made in a civil or criminal proceeding.
Can I appeal the IRS decision if I am not approved?
You have the right to request a reconsideration of any decision that denies you forgiveness, although it depends on your tax return status. The first step is getting in touch with your loan servicer to discuss your choices. Alternatively, you may submit a complaint with the Consumer Financial Protection Bureau if you’re still unhappy with the outcome.
What other tax advantages can reduce my tax bill?
Aside from seeking relief through an IRS debt forgiveness program, taxpayers can lower their tax bill when filing their tax returns, such as through tax-deductions and tax-credits. Additionally, making tax-advantaged investments, such as tax-deferred, tax-sheltered, or tax-exempt retirement accounts can offer tax benefits.
A wage-earning person can also lower their tax bill by adjusting their paycheck. Allowances are the withholdings that you claim on your W-4 that can reduce the amount removed from your paycheck every week, while exemptions are a specific type of deduction you can claim on your returns that balances your taxable income with the amount you withhold from your paycheck each pay period.
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