When you owe the Internal Revenue Service (IRS), you may wonder whether there is a way to avoid accumulating penalties and fines. Besides that, you may want to invest but fear that your tax lien will damage your financial credibility.
Luckily, the IRS offers a One Time Forgiveness program to help people deal with tax liability. Using this initiative, you can evade the negative consequences of owing taxes. You may also get enough time to organize your finances and repay the debt without causing significant financial problems.
Read on to discover several things you need to know about the One Time Forgiveness program. We will also explain how you can determine the most suitable tax relief program based on your needs and financial status.
How Many Options Does the One Time Forgiveness Program Have?
The IRS offers several options under the One Time Forgiveness program. These include Innocent Spouse Relief, Installment Agreements, and Currently Not Collectible. Innocent Spouse Relief allows you to avoid paying penalties, taxes, and interests if your current or former spouse provided wrong information when filing taxes.
For instance, if they did not disclose some of their income sources, which led to a penalty, you may apply for relief. This initiative is applicable if the IRS can only collect the amount due from the spouse. Besides that, you can only qualify if:
- The penalties are from self-employment taxes
- You can prove you did not know about the inaccuracy
- You and your spouse have not transferred money in a fraudulent scheme
Sometimes, your financial situation may make it very challenging to pay the taxes you owe. In such a case, you may apply for a Currently Not Collectible status. In case you qualify, the IRS will stop penalizing your debt and refrain from collection activities.
An Installment Agreement is a tax forgiveness program that allows you to repay your debts with a schedule. If you cannot remit the entire amount due to various issues and owe a debt of less than $50,000, you may benefit from the initiative.
Offer in Compromise (OIC) Tax Relief Option
OIC is a One Time Forgiveness relief program that is rarely offered compared to the other options. This initiative is an ideal choice if you can afford to repay some of your debt in a lump sum. Once you qualify, the IRS will forgive a significant portion of the total taxes and penalties due.
They will then provide a payment schedule allowing you to clear the remaining amount in installments. The payment period is usually a maximum of 72 months, whereby the IRS will require you to remit a specific figure without fail or delay for the entire period.
How Does One Time Forgiveness Work?
The One Time Forgiveness program you qualify for will mainly depend on your financial situation. However, determining the most suitable option may be challenging without professional help. It is advisable to consult with a tax resolution expert before applying for any relief program. By taking this step, you enhance the chances of qualifying and ensure you provide the IRS with correct information.
Once you apply for One Time Forgiveness, the IRS will assess your situation and evaluate eligibility. If they accept the application, they will provide a detailed repayment schedule.
Depending on the program you chose, you may send the amended debt in installments or lump sum. The IRS will also require you to remit all your taxes within the stipulated time moving forward. Other than that, they may perform periodic assessments on your financial status as needed.
Contact Tax Industry to Apply for Debt Relief
Each option in the One Time Forgiveness program has several qualifications you must meet to be eligible. Unfortunately, gathering all the details you need to apply for this initiative may be frustrating if you do not have extensive knowledge about taxation.
At Tax Industry, we offer professional resolution services to help you deal with debt. Our experts can assess your situation to help you apply for the most suitable One Time Forgiveness option. Reach out to us today for reliable tax debt resolution services.