By understanding these key aspects of IRS tax relief, taxpayers can better navigate their options and make informed decisions to address their tax obligations effectively.
IRS tax relief refers to various programs and options available to taxpayers who are unable to pay their federal tax liabilities in full. These relief programs are designed to help taxpayers resolve their tax debts, avoid or reduce penalties and interest, and achieve compliance with their tax obligations.
How Can IRS Tax Debt Relief Help You?
IRS tax relief options are subject to specific eligibility requirements and application procedures. Taxpayers seeking relief should carefully review their options and consider consulting with an attorney or tax professional to determine the best course of action based on their specific circumstances. IRS tax relief can help taxpayers in several ways including:
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An installment agreement allows taxpayers to pay their tax debts over time in monthly installments. Depending on the taxpayer's financial situation and the amount owed, the IRS may offer streamlined installment agreements or structured payment plans.
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An Offer in Compromise (OIC) is an agreement between the taxpayer and the IRS that settles the taxpayer's tax debt for less than the full amount owed. To qualify for an OIC, taxpayers must meet specific eligibility criteria and demonstrate that paying the full tax liability would create financial hardship.
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Taxpayers experiencing financial hardship may qualify for Currently Not Collectible (CNC) status, which temporarily suspends IRS collection activities due to the taxpayer's inability to pay. While in CNC status, the IRS will not pursue collection actions such as wage garnishment or bank levies.
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Penalty abatement allows taxpayers to request the removal of certain penalties, such as failure to file or failure to pay penalties, assessed by the IRS. Penalty relief may be granted if the taxpayer can demonstrate reasonable cause for the failure to comply with tax obligations.
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Innocent Spouse Relief provides relief to taxpayers who are held responsible for tax debts resulting from errors or omissions on a joint tax return filed with their spouse or former spouse. This relief option is available to taxpayers who meet specific criteria and can demonstrate that they were unaware of the tax issues.
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The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that assists taxpayers experiencing significant financial difficulties or facing IRS-related issues. TAS advocates on behalf of taxpayers to help resolve tax problems and obtain fair treatment from the IRS.
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Taxpayers have the right to request a Collection Due Process (CDP) hearing if they disagree with IRS collection actions, such as liens or levies. During the hearing, taxpayers can present their case and explore potential options for resolving their tax debts.
Reduce taxes
You can reduce the amount you owe the IRS by utilizing an Offer in Compromise (OIC), which is an agreement with the IRS that settles your tax debt for less than the full amount owed. To qualify for an OIC, you must meet specific eligibility criteria and demonstrate that paying the full tax liability would create financial hardship.
Provide refunds
If you are owed a refund by the IRS, you can check the status of your refund using the “Where’s My Refund” tool on the IRS.gov website. Generally, the IRS issues most refunds in less than 21 days, but some may take longer. If you need additional assistance you can utilize the Taxpayer Advocate Service (TAS) which can assist with a variety of IRS issues.
Prepare a repayment plan
If you owe the IRS money and cannot pay in full, you can enter into an installment agreement, which allows you to pay your tax debts over time in monthly installments. Depending on your situation and the amount owed, the IRS may offer streamlined installment agreements or structured payment plans.
Negotiate a debt settlement
Negotiating a debt settlement with the IRS involves reaching an agreement to pay less than the total amount owed to satisfy a tax debt. While the IRS may be willing to accept a settlement under certain circumstances, it's essential to understand the process and requirements involved.
Before initiating negotiations with the IRS, assess your financial situation thoroughly. Determine your total tax debt, including any penalties and interest, and evaluate your ability to pay the debt in full.
You should consider other options for resolving your tax debt, such as installment agreements, offers in compromise, or currently not collectible status. These options may be more suitable depending on your financial circumstances.
Next, contact the IRS to discuss your tax debt and explore the possibility of a settlement. Be prepared to provide detailed information about your financial situation, including your income, assets, expenses, and any extenuating circumstances that may affect your ability to pay.
If the IRS has initiated collection actions against you, such as liens or levies, you have the right to request a Collection Due Process (CDP) hearing. This allows you to present your case to an independent appeals officer and negotiate a settlement.
You can also submit an Offer in Compromise (OIC), by completing and submitting IRS Form 656, along with supporting documentation and the required application fee or initial payment. If the IRS accepts your settlement offer or is willing to negotiate terms, carefully review the terms of the agreement before accepting to ensure that the terms are feasible and you understand your obligations under the agreement. Once you and the IRS have agreed on the terms of the settlement, finalize the agreement by signing any necessary documents and making any required payments.
It's important to note that negotiating a debt settlement with the IRS can be a complex and challenging process. Consider seeking assistance from a qualified attorney with experience in dealing with the IRS to help you navigate the negotiation process and achieve the best possible outcome based on your unique circumstances.
How can Debtstoppers help you with IRS Tax Relief?
An experienced bankruptcy attorney at Debtstoppers can provide valuable assistance with IRS tax relief by offering specialized knowledge and legal expertise in navigating the complex interactions between bankruptcy law and tax law.
Here are several ways the Debtstoppers can help you with IRS tax relief:
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Assess Your Financial Situation - Our experienced bankruptcy attorneys can assess your financial situation, including your income, assets, and debts, to determine the most appropriate course of action for resolving your tax liabilities.
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Determine Eligibility for Bankruptcy - We can evaluate whether you qualify for bankruptcy protection under Chapter 7 or Chapter 13 of the Bankruptcy Code based on your financial circumstances and goals. We can fully explain the benefits and consequences of filing for bankruptcy and help you understand how bankruptcy can affect your tax debts, including the dischargeability of certain tax liabilities.
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Provide Legal Advice and Guidance - Debtstoppers can provide legal advice and guidance throughout the bankruptcy process, helping you understand your rights, obligations, and options for resolving tax debts.
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Assist with Tax Debt Dischargeability - Our attorneys can analyze your tax debts to determine which taxes may be eligible for discharge in bankruptcy and which taxes are considered non-dischargeable under bankruptcy law.
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Prepare and File Bankruptcy Petition - Our experienced bankruptcy attorneys can prepare and file your bankruptcy petition with the bankruptcy court, ensuring that all required documentation is completed accurately and submitted on time.
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Negotiate with IRS - Debtstoppers can negotiate with the IRS on your behalf to resolve tax debts and seek favorable terms, such as installment agreements, offers in compromise, or currently not collectible status.
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Advocate in Bankruptcy Proceedings - Our team of expert bankruptcy attorneys can represent you in bankruptcy proceedings and hearings, including meetings of creditors and court hearings, to ensure that your rights are protected and your interests are advocated for.
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Address Tax Liens and Levies - We can also help you address tax liens and levies imposed by the IRS by negotiating lien releases, requesting lien subordination, or pursuing lien avoidance in bankruptcy.
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Ensure Compliance with Bankruptcy and Tax Laws - Debtstoppers can ensure you comply with all applicable bankruptcy and tax laws and regulations, helping you navigate the complexities of the legal system while seeking relief from tax debts.
Debtstoppers can help you navigate the intersection of bankruptcy law and tax law to achieve IRS tax relief and obtain a fresh financial start. Our team of experienced bankruptcy attorneys understands the complexities of tax-related bankruptcy issues and can provide personalized guidance tailored to your specific situation.
