Paying taxes can be complicated. While most of us manage to pay our taxes to the federal government hassle-free, financial liabilities can sometimes lead to a delay in payment. Failing to pay these remaining taxes can add to one's overall debt. To help such taxpayers, the Internal Revenue Service (IRS) has introduced tax relief in the form of tax debt forgiveness programs.
This article sheds light on various ways the IRS offers tax relief. Tax debt forgiveness by IRS This is an initiative by the IRS for those who owe debt on pending taxes but cannot pay due to insufficient funds or other financial liabilities. The debt forgiveness programs by IRS require you to submit an Installment Agreement Request (Form 9465) with your income tax return. The pending dues to the federal government can be paid through the following IRS tax relief programs:
  • An Installment Agreement This tax relief program by the IRS is for individuals who cannot pay their tax debt at once. The taxpayers can make smaller monthly payments until the entire debt is paid off. The IRS has increased the threshold for installment agreements from $25,000 to $50,000. The maximum repayment term is now six years. Online applications are allowed for taxpayers who owe less than $50,000.
  • An Offer in Compromise Offer in Compromise (OIC) allows taxpayers to settle their tax debt for less than they owe permanently. That said, this is an exclusive program for individuals facing financial hardships or special circumstances. The IRS has also expanded its OIC program to cover a larger group of taxpayers that are going through financial hardships. It is important to keep in mind that it is entirely under the IRS's discretion to settle tax debts permanently.
  • Tax relief for zero balance The IRS offers tax relief for those with zero balance in banks and investment accounts. The IRS reviews the eligibility annually, using it for future tax refunds to pay for current tax debt until it is paid in full. In an unlikely scenario, the IRS might write off remaining penalties and taxes due to statute of limitations for individuals in CNC for ten years.
Filing for taxes and applying for tax debt forgiveness can be both tedious and tricky. A single discrepancy or irregularity in filing taxes can result in failure to get tax relief from the IRS. Hence, it is recommended to use the following tax relief companies:
  • Anthem Tax Services Anthem Tax Services, started by licensed tax professionals, has over 30 years of experience in tax law and tax preparation, offering its consultation in all 50 states. The company is accredited by both, National Association of Tax Professionals (NATP) and the National Association of Enrolled Agents (NAEA). It offers services in tax debt resolution in the form of installment agreement, OIC, and Penalty Abatement.
  • Fortress Tax Relief The tax relief company is known to resolve tax debts for businesses and individuals alike. It is one of the few companies with an hourly-based fee structure and handles tax debt forgiveness cases in all 50 states. Fortress Tax Relief offers services in Innocent Spouse Tax relief, Offer In Compromise (OIC), Installment Agreement, Penalty Abatement, and Business Tax Relief. However, an individual must have over $10,000 in tax debt.
  • Community Tax It is one of the few tax relief companies that offer services for a minimum tax debt of $5,000. Community Tax, an IRS-approved tax relief company, provides services of OIC, Installment Agreement, Streamline Installment Agreement, Partial Pay Installment Agreement (PPIA), Penalty Abatement, and much more.
IRS suggests that if one has trouble meeting tax obligations, it is necessary to contact the IRS representative, state comptroller, or a qualified agency for collection alternatives. It is essential to avoid tax relief companies that assure one to "qualify" them for resolving their debt, enroll them in a particular tax relief program without prior knowledge of their financial and taxation status. An important point to note: Only the State Comptroller and IRS can determine if a person qualifies for tax debt forgiveness.