What is Tax Debt Relief and how can it help

What is Tax-Debt Relief

 

What is Tax Debt Relief?

The broad concept of tax-debt relief encompasses many options. Each option is designed to bring the IRS and taxpayers in debt the closest possible. (We'll talk about state and local taxing authorities later.)

A payment plan or a settlement of your debts is the most common form of relief. Also known as an offer in compromise, The financial situation of the tax-debtor will determine which one is best.

Who could be eligible for tax-debt relief

• Taxpayers who are behind in their payments and don't have the funds to pay off their debt via personal loan or home equity loan, credit card, investments, etc.
• Private debt collectors employed by the IRS have brought taxpayers in arrears to their attention.
• Individuals who have not filed tax returns in any number of years but have managed to operate below the radar of the IRS.
• The IRS has directed the State Department to cancel, revoke, or confiscate passports of taxpayers who are so seriously indebted ($50,000 or more).

The IRS has programs available for taxpayers who are in default. The taxpayer can initiate any of these programs by themselves. To help consumers navigate the rules of the tax agency, there is a tax settlement industry.

Advertisements often feature players with impressive credentials and experience. Pay attention.

Although many tax settlement companies boast a list of ex-IRS agents and other tax experts who are available to help you reduce your owes, the truth is that there is more to it than this. Low-wage customer service representatives are the most common members of tax settlement companies. They have a limited amount of expertise.

A tax settlement company is a company that will:

• Find out why the customer is late or has not filed.
• Get the correct financial information from your customer
• Give a realistic assessment of what the company can accomplish
• The best IRS program available to help troubled taxpayers
• A reasonable flat fee will be charged

IRS Relief Options

The IRS offers several options to delinquent taxpayers, including payment plans, offers of compromise, and filing as not currently collectible.

Installment agreements work in the same way as any other loan. You pay a fixed amount each month for some time (up to six-year) until you have paid your tax bill. An installment agreement does not allow for the accrual or payment of penalties. However, interest is charged as a loan. There will also be processing fees.

You can apply online for an installment agreement if you owe less than $50,000 in taxes, interest, penalties, and combined taxes. Installment agreements have the upside of avoiding liens, levies, and garnishments.

If a taxpayer can show that they cannot pay the entire amount due now or over time, they may be eligible for an offer in compromise (OIC). This is an agreement to settle tax debts for less than the amount owed. The IRS considers many factors such as the ability to pay, income and assets, as well as income and expenses. The IRS will generally accept an offer in compromise if the amount offered is the maximum it can collect within a reasonable time.

All applications must include a 20% deposit and a $186 non-refundable fee.

Accepted offers in compromise may be paid in one of two ways. One is a lump sum or in monthly installments. An OIC should not be your first choice, as the IRS is unlikely to accept them, despite some advertising by tax relief companies suggesting otherwise.

Delinquent taxpayers with little or no income after paying essential expenses such as rent, utilities, groceries, and commuting can be eligible for a deferral. The IRS will stop collecting taxes if it deems them "Currently Not Collectible". This gives the taxpayer some breathing space and allows him or her to be free from the threat of having the IRS breathe down his neck.

There are also downsides. The tax debt will not be paid; it will accrue interest and penalties and the IRS could file a lien on the taxpayer's property (which appears on credit reports). Taxpayers who expect a refund in the future can forget about this; the IRS will apply them to past-due taxes that remain unpaid.

IRS Forgiveness Program

The IRS's Fresh Start Initiative used installment agreements and offers-in-compromise to lure troubled taxpayers into compliance. But the expanded program makes it even easier to apply for installment programs or offer in compromise settlements.

Here are some highlights:

• Offers that are paid off in less than five months will not be considered. The IRS now considers only one year's future income instead of four when assessing the taxpayer's reasonable collection capacity. The IRS considers only two years of future earnings for longer payoffs, six to 24 months (down from five).
• The IRS increased the Allowable Living Costs calculation to include bank fees and credit card payments.

Penalty and Interest Reduction

Although it doesn't often happen, in some rare cases, the IRS might offer penalty abatement to delinquent taxpayers who can demonstrate a hardship. The IRS's First Time Penalty Abatement policy allows it to grant administrative relief to taxpayers who fail to file returns, pay taxes on time or deposit them.

These are the criteria that the agency uses to determine eligibility:

• Either you didn't have to file a previous return, or you don't have penalties for the three prior years in which you have assessed a penalty.
• You have filed all required returns.
• You have either paid or arranged for payment of any tax.

Interest abatement is more restricted and rarely approved.

However, no relief will eliminate the tax billowed. The failure-to-pay penalty continues to accrue until the full amount of your tax has been paid. You don't want to be denied partial relief. It may be better to wait until the full amount of the tax is paid before you apply for the first-time penalty reduction policy.

Other options for debt relief

If you are truly in crisis and if there are several provisions, older income tax debts (at least 3 years) can be discharged through Chapter 7 personal bankruptcy.

The statute of limitations allows you to discharge tax debt. After 10 years, taxes that the IRS attempted to collect but was unable to collect are erased.

Consult a trusted tax debt relief service to avoid extreme measures. They may be able to help you with bank account seizures, liens, wage garnishments, and other issues.

Signs that a Tax-Debt Relief Scam is in Your Face

There are predators, as with every industry, especially when it comes to dealing with panicky, desperate clients.

This is also true for tax debt relief.

Don't fall for the hype. For most tax debtors, getting out of trouble is impossible for pennies per dollar. Next, do your homework. Look beyond the advertisements for impartial-observer ratings of legitimate tax relief businesses. Be aware of when to avoid dealing with bad actors.

These are signs that a tax debt relief company may be trying to scam you:

• It is a sign of a major indicator that the company will demand payment before they do anything.
• Offering a promise of a dramatic reduction in taxes for customers upfront
• You can pledge to reduce or eliminate penalties and interest.
• Failing to ask the client why he is behind the IRS
• Failure to assess your financial history thoroughly (which the IRS will certainly do before it approves any OIC); any company that does not take the lead here likely can't or won't help you.
• You can contact us directly by email or letter.
• Delaying tactics include repeatedly asking for the same documents.
• After waiting months and paying in, you are finally told that your debt relief window is closed or that your OIC application was rejected by the IRS. Often, these companies have done nothing but take your money and keep you on the hook.

Horror stories can add insult to injury. Taxpayers who signed up with a tax relief company and paid thousands of dollars upfront fees complained to the Federal Trade Commission regarding unauthorized charges on their credit cards or withdrawals from their bank accounts.

Innocent Spouse Relief

The IRS is sympathetic to spouses and former spouses who find themselves in the middle of back taxes. Joint returns can make both spouses liable for any tax owed. However, in some cases, one partner may be exempt from any penalties, interest, or taxes.

The spouse must meet the following criteria to be eligible:

• Filled joint return that incorrectly understates tax liability directly to the spouse
• Must not have known about the error
• Once the IRS has been identified, it must agree to release the innocent spouse from the tax dispute
• Within two years after the IRS begins the collection, the spouse must request relief

State and Local Taxes

It is quite different to fall behind in your state or local taxes. Although many states and local taxing authorities offer similar programs to the IRS for debt settlement, there are important differences. Some states allow waiver of interest but not penalties. Other states allow the reverse. You may get different results.

Contact your state's comptroller for more information. For a complete list of state treasurers, comptrollers and auditors, visit nasact.org

The IRS has many tools they can use to make you pay your tax debt. They have the power to place a lien on your property and garnish your wages. They have the power to seize money from your bank accounts and hold your refund. In some cases, they can even cancel your passport. It can be difficult to get your money back if the IRS or another state agency begins exercising its power over you. The sooner you get rid of the IRS, the better.

Here's how we can help you with your tax debt relief.

We offer tax debt relief. We work with you to engage the IRS and state agencies to find a way to pay off your debt. It all depends on how much you owe and what your financial situation is.

The IRS will examine your ability to repay the debt. The IRS can settle your debt for less if you have financial hardship. They would prefer to get a little more than nothing in many cases. We can often get the IRS to cooperate with you, even if your ability to pay is very high. We can often remove penalties and stop wage garnishments. We can help you set up a payment plan with IRS.

A professional tax relief company will create a customized tax debt relief plan for you to get the most tax debt relief.

Many solutions exist to tax debt. It can be time-consuming and difficult to find the right solution for you. Top tax professionals have decades of experience in dealing with the IRS. They will find the best solution for you.

Here's how it works:

Step 1: Free Consultation
To request a complimentary consultation, call us. You will not be speaking to a salesperson during your free consultation. Instead, you will be speaking with a licensed tax professional. The tax professional will listen to you and give you a general overview of your tax debt story. You will know if the expert can reduce, or even eliminate, your tax debt by the end of the conversation.

Step 2: Compressive Assessment
TaxAudit is qualified to help you. The next step is a comprehensive assessment of your financial situation. Based on an in-depth assessment of your financial situation, your tax professional will create a realistic plan to combat your tax debt. Before the assessment can begin, your tax professional will request information from you and any documents. The tax professional will then create a plan to help you get the best tax debt relief and share this with you. Your tax professional will then give you a flat-fee quote for the tax company to complete the services described in your action plan. After your assessment is complete, you will receive a customized plan that addresses your tax debt situation as well as a flat fee quote to perform the services recommended in your case.

Step 3 - Resolution
After you accept the tax company’s quote for Tax Debt Relief, your tax professional will begin to work on your case. Your tax professional will prepare all necessary paperwork and submit it to the IRS. Your best interests will be protected during negotiations with the IRS. He or she will keep you informed about the progress of your case from the beginning to the end.

What is the IRS Debt Forgiveness program?

For taxpayers who owe taxes unpaid, the IRS offers many relief options. The circumstances surrounding your unpaid tax debt will determine whether you are eligible for each option. Here are some examples of forgiveness and relief options.

• Installment Agreements allow you to reduce your tax debt by paying in smaller amounts if you're unable to make a full payment. The average repayment period is 72 months. If you owe less than $50,000 in combined taxes, penalties, interest, and tax, this option may be available to you.
• Innocent Spouse Relief allows qualified candidates to avoid penalties stemming from tax fraud or inaccuracies that they did not know about.
• Offer in Compromise (OIC) is a settlement option that allows some taxpayers to pay much less than they owe the IRS.
• Currently not Collectible (CNC). status is basically a "clean slate", program for people who can show they cannot pay back tax debt.

IRS tax debt forgiveness cannot be granted automatically if you meet all the requirements. Fill out the IRS debt forgiveness form.

The IRS will not consider your eligibility for tax relief benefits unless you have filed all of your tax returns. When assessing your eligibility, the IRS will not consider the fact that you filed tax returns late yourself. If you are still unfiled, it is a good idea to get current.

How does tax debt forgiveness work?

To determine which forgiveness plan is right for you, we will consider your financial situation. These are the steps to an IRS debt forgiveness program:

• Acceptance to the right program after applying
• Consent to keep current with all tax returns going ahead
• Accepting all terms and conditions set forth by the IRS regarding totals due, penalty abatement, and payment terms
• Accepting that the IRS periodically reassesses your financial situation
• Payment plan or a lump-sum payment to pay off full or amended debts

Based on your financial situation, and your tax debt, the IRS will calculate how much you must pay. The first step in 

determining if you are eligible is to apply

.

Who is eligible for IRS tax debt forgiveness? What Do I 

Need to Qualify for IRS Tax Debt Forgiveness?

Without consulting a tax professional, it can be hard to determine if you are eligible for debt forgiveness. If you haven't paid your entire tax bill because of financial hardship, the IRS may be willing to make an agreement with you. These are the key factors that the IRS considers:

• Tax balances below $50,000
• A single filer income cap of $100,000
• For married couples filing jointly, there is an income limit of $200,000
• Self-employed people will see a 25 percent drop in their net income

Nearly all applicants will be approved for an IRS repayment agreement. Repayment may not be the best choice for you. An Offer in Compromise, or currently non collectible status may allow you to pay less overall. Both of these options will require you to provide financial information to IRS. You don't want to present any information that could contradict your claim that your tax bill is unpayable.

Is the IRS ever willing to forgive tax debts?

Although it is unlikely that the IRS will ever completely forgive tax debt, accepting into a forgiveness program can help you avoid the costly, credit-wrecking penalty that comes with tax debt. If you can show hardship, your debt may be completely forgiven.

What is the Fresh Start Program with the IRS?

Officials at the IRS recently introduced the Debt Forgiveness Act, making it easier for taxpayers seeking relief. All of the options that we have covered in this article are available through the IRS Fresh Start Program. The program also allows you to have a federal tax lien removed if your request is granted.

Find out if you are eligible for IRS debt forgiveness

The Tax Group Center is the place to go if you have a tax debt hanging over your head. You may be eligible for the Fresh Start Program. You may start by completing unfiled tax returns.

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How to eligible for the IRS Fresh Start Program

Irs fresh start program

The IRS Fresh Start Program is a general term that refers to the various debt relief options available by the IRS. This program was created to help taxpayers get out of tax debt and penalties legally. You may be able to reduce or freeze your debt. Some options allow you to repay your debt in smaller amounts over a longer period. The Fresh Start Program is a collection that makes changes to the tax code. The program offers different levels of relief and repayment options depending on each applicant's financial situation. In 2011, the IRS created the Fresh Start initiative to assist more taxpayers in getting back to good standing. This program encourages reasonable repayment options rather than imposing penalties. Yes, taxpayers can benefit from the program. They may be able to pay taxes while avoiding Levies and wage garnishments. The IRS can also benefit from the fact that it can collect "something", instead of nothing, from taxpayers. Let's take a look at Fresh Start.

• Offer in Compromise
• Installment Agreement (IA).
• Current Non-Collectible (CNC).
• Penalty abatement

To determine which option is best for you, it will take time to sit down with a tax professional. To determine if you are eligible for these relief options, the IRS will need detailed financial information. Things like active wage garnishments and bankruptcy could make things more complicated. Continue reading to find out if you are eligible for a fresh start at the IRS.

Am I eligible for the IRS Fresh Start Program?

First, the IRS designed its Fresh Start tax program so that it is available to everyone. Because there are so many options within the program, you will likely find at most one channel that is suitable for debt relief. You can still benefit from working with a tax professional to explore the options available to you, despite the complexity of the IRS Fresh Start program.

Current tax returns are the one hurdle you'll need to jump. Before you can be considered for the Fresh Start program, the IRS will require that you are fully current with all tax returns. The correct amount of withholdings must be made for the current tax year. This is an IRS way to ensure taxpayers are accountable.

IRS Fresh Start Program Qualifications

The IRS Fresh Start tax initiative offers generous and inclusive benefits. There are some requirements that you need to be aware of. These are the requirements to be qualified:

• self-employed Individuals must show a decrease of 25% in their net income.
• Joint filers cannot earn more than $200,000 per year.
• A single filer can't make more than $100,000 per year.
• Your tax balance must be below $50,000 by the end of the year.

You must apply for the option that is best suited for you. The IRS will not automatically apply the Fresh Start program for your tax debt just simply because you are eligible. The IRS charges interest, penalties, and interest until the entire amount is paid. It's important to apply for help or request assistance as soon as possible.

What is the Fresh Start Program?

Fresh Start IRS offers a way for you to pay off your debts and avoid paying penalties. To get started, you will need to provide the necessary documentation and forms to the IRS. The IRS will create a plan that includes either monthly payments or lump payments.

How to apply for the IRS Fresh Start Program?

Each relief option offered by the IRS is eligible for an eligibility form. These forms will need to be completed by you honestly and fully. A tax professional can help you to eliminate the stress and confusion that comes with the process. An expert can help you to make sure that you are following all guidelines and that your application is the right one.

What can Tax Group Center do to help?

Since 2011, the Tax Group Center team has helped people to take full advantage of the IRS Fresh Start program. We are therefore very familiar with all aspects of the program. If you have a problem with delinquent taxes, Tax Group Center can assist in many ways.

We'll first identify any potential penalties or interest charges you should be aware of between now and the time you are approved for a relief plan. Next, we will discuss your circumstances with you to determine which Fresh Start tax program option is best for you. To increase your chances of getting accepted, we'll walk you through each step of the application process. Because we understand the language of IRS, we can help our clients with all aspects of the application process. Our team will help you navigate the tax process and ensure you comply after you have been accepted to the Fresh Start program. To avoid breaking your agreement, we can help you file your taxes on time. Call us today to find out how you can get substantial tax relief under the IRS Fresh Start program.

Individuals | Fresh Start Program

The IRS Fresh Start Program is available to individuals who are willing to repay their debts in installments using a direct payment arrangement. The IRS Fresh Start Program allows qualified individuals to pay their taxes in smaller amounts, over a longer period, and with fewer penalties.

In determining how much you can repay, the IRS will consider your ability to pay, current income, expenses, and asset equity.

Each option comes with a unique application, qualification, and procedure.

All you have to do is meet the following requirements:

• You owe less than $50,000, or you owe more but can reduce your debts up to this amount before beginning the program.
• Your outstanding debt can be paid off in as little as 60 months.
• You have filed your tax return and it is up-to-date.
• This is your first time falling behind in payments to the IRS
• You agree to a direct installment agreement
• While you pay your installments, you will keep the installment agreement intact. You will also keep up with tax filings and not be in any further tax debt.
• You can file for OIC, and you will be able to pay the Fresh Start Initiative settlement amount in 12 months.

You may be eligible to have specific penalties reduced if you are a first-time borrower. You may be eligible to have your federal tax lien removed if your debts are less than $25,000, or you can reduce them to that amount before you start the program.

The program offers three repayment options: the extended installment agreement, the tax lien withdrawal, and the compromise offer.

Fresh Start Program

You may also be eligible for the Fresh Start Program if your business is a business owner who owes taxes. These requirements will apply to you:

• Your company owes less than $25,000
• The full amount will be repayable within 34 months
• You are up-to-date with federal tax filings.
• This is the first time that your company has fallen behind in payments to the IRS
• A Form 433-A Collection Statement for Wage Earners or Self-Employed Individual will also be required. The qualified business income deduction is a great way to lower your income taxes for many taxpayers who own small businesses.
• Our goal is to make payments affordable so that you can afford them without any financial burden.

We've only briefly covered the basics of this program. We are happy to answer any questions you may have, to give you a definitive answer about eligibility, or to help you apply for the Fresh Start Initiative. No matter what your situation, our friendly, qualified tax professionals can help you find the best way to move forward.

Fresh Start is an IRS initiative that can help you if you are having trouble paying back taxes or are concerned about staying on top of your tax payments. The IRS Fresh Start program provides tax debt options that make it simpler and easier for individuals and small businesses to pay back their taxes. The program's most popular features include the extended installment agreement, simplified and expanded Offer in Compromise (OIC), as well as two types of tax lien relief. Each one of these options to pay off your tax debt has its eligibility requirements. We'll discuss them below.

The Extended Installment Agreement

The extended installment agreement is the most popular option under Fresh Start. This allows you to pay off your tax debt for up to six years. Based on your income and assets, the IRS will determine an affordable monthly payment amount. You don't have to worry about additional penalties or interest if you take advantage of this opportunity. Your property. The IRS will suspend these activities while an installment agreement is in effect and current.

Extended installment agreements are available to taxpayers with back taxes of less than $50,000. If your debt exceeds this amount, you may be eligible for the extended installment agreement. You can still apply to an installment agreement if your outstanding balance is greater than $50,000 and you are unable or unwilling to pay it down to $50,000. However, the application process to obtain an installment agreement for amounts exceeding $50,000 is more complex. An IRS collections staff member will negotiate your agreement. They will also need detailed information about your assets and income. You must have filed all required federal tax returns, and paid all estimated payments to be eligible for an extended installment arrangement.

Compromise or Offer

The Offer in Compromise (OIC) is another option under Fresh Start. OIC is a way to settle tax debts for a lesser amount than you owe. OIC has been available for tax debtors since the beginning. However, the Fresh Start program gives the IRS more flexibility in determining who is eligible.

The IRS won't accept an offer of compromise unless you can pay your tax debt completely, either by installment agreements or equity that could be used to satisfy the debt. You must have filed all required federal tax returns, and paid all estimated payments. All required federal tax deposits must also be submitted if you are self-employed or have employees. You must also not be involved in an open bankruptcy proceeding.

Applying for an offer of compromise is a complicated process that requires you to provide detailed information about your assets and income. The IRS requires you to complete Form 433A (OIC), Collection Information Statement For Wage Earners and Self Employed Individuals, or 433B (OIC), Collection Information Statement For Businesses. You must provide information about the assets and bank accounts, as well as brokerage and investment accounts, as well as other assets, such as cryptocurrency and collectibles. Also, your income, monthly expenses, and loan amounts must be reported. These are used to determine how much you can afford.

Select a payment option, and then submit your first payment along with your application. The IRS will apply your payment towards your tax debt regardless of whether they return your application due to unfiled federal taxes returns or unpaid estimated tax payments. You must continue making monthly payments until the IRS reviews your offer.

There are two types of tax lien relief

The Fresh Start initiative increased the threshold amount of tax debt for filing a tax lien notification from $5,000 to $10,000. This means that the IRS won't generally issue a Notice Federal Tax Lien for tax debts below $10,000. Fresh Start's second provision regarding tax liens allows you to enter into a Direct Deposit Installation Agreement (DDIA), which will stop the IRS from putting a lien onto your property. You must sign a 60-month-long direct installment agreement. After you have made three direct installment payments, the IRS will withdraw the Notice of Federal Tax Lien.

Your tax debt must be less than $25,000 to be eligible for DDIA. Except for a lien withdrawal that was caused by an incorrect NFTL filing, you cannot have any prior lien withdrawals. As with all other provisions, your tax filings must be current.

Fresh Start was created to ease some of the stress and complexity associated with paying back taxes. However, managing your tax debt alone can cause anxiety and confusion. That is why we are here for you. A tax professional will help you decide the best course of action for your situation. We can help you create an affordable payment plan, eliminate penalties, or even reduce your tax debt with an offer in compromise.

You can work with a professional to determine eligibility for Fresh Start. However, it doesn't matter if you do so DIY. The most important thing to do is to respond to any IRS notices or letters immediately. You will be more stressed if you delay in responding to any IRS notices or letters. You can get the fresh start and financial freedom you desire by acting quickly to pay off your tax debt.

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