Tax Relief

What is Tax Relief?

Many individuals experience tax problems within their lifetime. These tax issues can seem overwhelming, especially if you have fallen behind on filing your taxes or you have gone into collections. Individuals with unfiled taxes or have been audited by the IRS should look into tax relief services that can help resolve their tax issues. Tax relief can help those who have gone into collections or fallen behind in their taxes by setting them up on a payment plan or by negotiating with the IRS. When you have an unpaid balance to the IRS, you risk bank levies, wage garnishment, and possibly interest or penalties on the unpaid balance owed. We at The Tax Defense Group can help you relieve your tax payments and settle your tax balance. 

Tax Relief Options

There are many options for individuals who owe money to the IRS to resolve an unpaid balance. Here are four common options for individuals who owe money to the IRS: 

    1. Installment agreement

If you do not have the ability to pay off your balance right away and need an extended period of time to settle your balance, the IRS will typically create a payment plan or installment agreement. Individuals who have a tax balance of over $25,000 or businesses that have balances over $10,000 are required to use direct debit or an automatic withdrawal from your bank account.

    2. Offer in Compromise 

If you are going through a large financial hardship, the IRS may re-evaluate your tax balance and possibly have you pay less than what you owe. This process is known as Offer in Compromise. The IRS gives this option to tax payers only when an individual has proven that they are unable to pay their debt or there was an event that created relevant financial problems. The IRS may then reduce the individuals tax balance and re-evaluate their amount owed. The IRS looks at the following factors when deciding if an individual qualifies for an Offer in Compromise:

              • Your income and expenses.
              • Any assets you may have.
              • Ability to pay.
    1. Penalty Abatement

If you have not paid your taxes on time and are facing penalties, you may be able to get them removed through penalty abatement or a penalty adjustment. The elimination of an assessed tax liability is abatement. An adjustment is just a reduction or alteration of it. In many cases, you may even avoid penalties and get your interest refunded.

    1. Request for an Extension 

If you have the means to pay the balance in full but require time to gather the money, the IRS will allow a request for a one-time extension. The request allows up to 120 days to pay the tax balance in full. The IRS will apply a 0.5% penalty per month of unpaid balance. If the extension date is missed, the IRS will place you back into collections. 

Tax Relief in Disaster Situations

Those who have been affected by natural disasters such as hurricanes, floods, wildfires, pandemics, earthquakes, and more could be entitled to special tax relief. Victims could qualify for payment extensions and may possibly claim casualty losses on federal income tax returns. 

Coronavirus Tax Relief

As part of the U.S. government’s ongoing response to the Covid-19 pandemic, some tax rules have changed, and new coronavirus tax relief initiatives may be available. 

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