Tax Debt Relief & Resolution : Ways To Deal With Tax Debt

Are you looking for tax debt relief? If your answer is yes, then you’ve come to the right place. Because each year millions of Americans struggle to pay back their taxes. You don’t want to be one of those millions of Americans. However, most taxpayers don’t realize the tax relief options that are available. For example, just because you have a tax debt to pay doesn’t mean you can pay it. In other words, whether you have $10,000 or $50,000 in tax debt, it’s hard to pay it all at once. For that reason, the IRS offers taxpayers tax debt programs. In other words, you don’t have to feel obligated to come up with the money to pay your tax debt. The IRS offers plans for taxpayers to settle tax debt affordably. However, you just have to know that these tax relief plans exist.

What Is Tax Debt Relief?

 It is the federal government’s way of helping out when you can’t settle tax debt. For instance, the IRS offers several ways to settle tax debt. You can enter into a payment plan with the IRS. In a payment plan, you agree to pay affordable monthly payments. Alternatively, you can apply for an Offer in Compromise deal. This Deal is almost exactly like it sounds. In other words, you make an offer with the IRS to come to a compromise on your tax debt. Typically, taxpayers who get approved for this deal pays much less than they owe. So, if you owe money to the IRS but don’t think you can pay, consider your options. However, you want to make a plan well before your taxes are due on Tax Day.

Is Tax Debt Relief An Option For Me?

Typically, tax debt relief is an option when you owe the IRS and can’t afford to pay. However, it’s important to state that you can’t lie to the IRS. For example, if you’re able to settle tax debt, but say you can’t, the IRS will catch on. In other words, the IRS has access to all your financials. What this means is they know how much money you have in your bank account. Additionally, the IRS understands the value of your assets. In other words, you can’t hide anything from the IRS. However, don’t stress about the thought of owing money yet. If you haven’t filed your taxes, that’s what you need to do first. Filing your taxes ensures you’re in good standing with the IRS. Additionally, filing taxes will also help quantify how much you owe the IRS. Once you know what you owe, you can explore options.

Should I Hire A Tax Relief Firm?

 When you’re looking to negotiate with the IRS, you should have a tax relief firm on your side. However, some taxpayers may think they know enough to negotiate with the IRS on their own. You are certainly allowed to represent yourself against the IRS. However, it’s not always a good idea to go at it alone. The reason is, you could be putting yourself in more danger than you realize. Therefore, hiring a tax relief firm can be helpful, and money-saving. However, make sure you look out for fraudulent tax relief companies. Don’t trust any company that claims to get your tax debt erased. While we promise we’ll do our best, we can’t erase your tax debt. It is simply helping you find ways to settle your tax debt. In contrast, tax debt relief is not wiping your total debt clean.

What Type of Tax Relief Programs Exist?

The IRS offers various types of tax relief programs. Before you determine which tax debt relief plan is right for you, consult with a professional. A tax relief expert can look at our situation and determine which relief program will give you the best outcome. Additionally, a tax relief professional can also help you negotiate your deal with the IRS. Here are a few different options you have with the IRS for settling your tax debt.

What Type of Tax Debt Relief Exists?

What Type of Tax Debt Relief Exists?

An Installment Agreement allows you to pay back your taxes in affordable monthly payments. Additionally, the IRS has different tiers for Installment Agreements. For instance, the IRS will approve your request if you owe less than $10,000. The IRS is likely to approve your request if you’ve filed your income tax returns in the last five years. You also have to fill out a form in most circumstances. However, if you owe $50,000 or less, you can avoid filling out a form and apply online. Typically, most Installment Agreements will meet the IRS criteria. Likewise, with an Installment Agreement, you pay small monthly payments until your debt is paid in full.

How Long Do I Have to Repay an Installment Agreement

The maximum repayment term for the IRS Installment Agreement is six years. However, if you can pay back your tax debt in four months, you’re not a good candidate. Instead, the IRS will recommend that you go online to pay your tax debt balance.

Who is Eligible for an Offer in Compromise?

It’s important to note that there are certain criteria to be eligible for an Offer in Compromise. Most importantly, the IRS determines if you’re eligible by:

  1. Checking your income
  2. Reviewing your expenses
  3. Checking your asset equity and your ability to pay

Alternatively, if the IRS feels you are eligible to pay the full amount, your OIC will be rejected. However, if your OIC application is rejected, you can still apply for an Installment Agreement. In other words, you do not have to worry about paying your tax debt back in one fell swoop. Even if you can afford to pay all at once, there are payment options available to you.

What is the IRS Fresh Start Program?

Another form of tax relief is the IRS Fresh Start program. This program allows you to settle tax debt in a variety of ways. Likewise, the goal of this program is to give taxpayers a more affordable way to settle tax debt. Similarly, the Fresh Start program provided by the IRS gives taxpayers with substantial tax debt six years to affordable pay it off. For instance, each month taxpayers make payments to the IRS. These payments are based on their current income and the value of their liquid assets. At the end of the six years, the taxpayer’s tax debt should be paid in full. In conclusion, the Fresh Start program simplifies the process of paying back large tax debts. Furthermore, the Fresh Start program helps people avoid the downside of owing back taxes, including:

  • Interest
  • Penalties
  • Tax liens
  • Seizure of assets
  • Wage garnishments

Who Qualifies for the Fresh Start Tax Relief Program?

People who owe $50,000 or less in tax debt can qualify for this tax relief program. Additionally, taxpayers can choose from one of three payment options when they apply to this program.

  • First, a taxpayer can apply for the IRS Installment Agreement. This program gives the taxpayer six years to pay off what they owe. Additionally, the taxpayer does not incur any interest or penalties while they’re paying off their tax debt with IRS debt help.
  • Second, a taxpayer can apply for an Offer in Compromise through the Fresh Start program. As mentioned, an OIC is rare but taxpayers can pay off what they owe the IRS.
  • Third, a taxpayer can apply for a tax lien withdrawal. In other words, a taxpayer approves for their account to be automatically debited for the payment each month. A tax lien withdrawal also lowers the threshold under which the government can place a tax lien on your account. At FinishLine Tax Solutions, we can also help you get that tax lien released.

How Can I Apply for the Fresh Start Program?

Before you apply for the Fresh Start tax debt relief program, you must file all outstanding tax returns. The IRS will not allow you to apply for this program until you have filed all taxes. For instance, you may not have filed taxes this year, and owe the IRS. However, the IRS will not know how much you owe, and can’t confirm your tax payment amount.

Who Needs Debt Relief Program?

Several groups of taxpayers may require tax debt relief. However, before you apply for this program, check with your tax professional. The IRS offers many types of IRS programs. Therefore, it’s best to understand your tax situation first before you apply. However, here are some of the individuals who may require tax debt relief.

  • Taxpayers who have fallen behind on their taxes. Additionally, taxpayers who lack the resources to pay their tax debt
  • A taxpayer who has been contacted by private debt collectors hired by the IRS.
  • Those who have not filed tax returns for several years.
  • Taxpayers whose debt has caused the IRS to revoke or confiscate their passports. Typically, only individuals who owe $50,000 or more are in danger of losing their passports.

Can I Get Tax Relief from Interest and Penalties?

The IRS does offer several programs to reduce penalties charged on tax debts. For instance, through a penalty abatement program, the IRS may reduce some of the penalties charged on your taxes. As a result, your tax debt will be lower. However, it’s very rare for the IRS to forgive interest charged on taxes. Therefore, the longer you go without paying taxes the more interest you will accumulate.

What if My Spouse Needs Tax Debt Relief?

In some cases, it’s the spouse that needs tax debt relief. The IRS sympathizes with spouses or former spouses who find themselves in tax trouble. For instance, you may have filed jointly with your spouse and are therefore partly responsible for their wrongdoings. In some cases, this program can relieve a partner of any taxes, interest, or penalties. In other words, an option called Innocent Spouse Relief is sometimes an option for married or divorced couples.

What are the Criteria for Innocent Spouse Relief?

There are several requirements taxpayers must meet to qualify for Innocent Spouse Relief. To be eligible, the spouse must:

  • Filed a joint tax return containing the errors.
  • Must have lacked knowledge of the error.
  • Once identified, the IRS must agree to relieve the innocent spouse of the tax in question.
  • A spouse must apply for tax debt relief within two years of the IRS initiating the collection.

What Will the IRS Do If I Don’t Pay Taxes?

When you’re seeking relief from tax debt, it’s important to look out for collection actions. If you can’t pay taxes but haven’t applied for a relief program yet, the IRS will come after you. For instance, the IRS can mail you letters requesting payment for the debt you owe. Additionally, some of the IRS’ popular collection actions include:

  • Tax lien: the government’s claim against your property
  • Tax levy: the government’s legal seizure of your property to satisfy the outstanding unpaid tax debt.
  • Wage garnishment: the IRS takes a portion of your income to settle your existing tax debt.
  • Before the IRS starts knocking on your door, it’s best to come up with a tax relief plan.

Get Help with Tax Debt Relief

The first step to tax debt relief is understanding what you owe. Likewise, dealing with the IRS isn’t easy to do alone. Fortunately, there are professionals, like FinishLine Tax Solutions, who can help you figure out your options. In some cases, professional help may be necessary to get the best outcome for your tax situation. FinishLine Tax Solutions’ team of trained tax professionals has been helping people with IRS issues for years. Call us today and find out how we can get you back on the road to financial freedom.

Tax Relief Services by Tax Professionals

As the sales and use tax audit proceeds, we will monitor the sales tax auditors’ work papers, present our rebuttals, and propose adjustments. Additionally, we will search for refund and credit opportunities overlooked by most state sales tax auditors. If we are not satisfied with the sales tax auditors’ results, we will call in the state’s sales tax audit manager as an escalated measure. If the manager does not offer a satisfactory resolution, we will continue to appeal your case to the next level until we reach a satisfactory final resolution.


Related Blogs:

  1.  4 ways to get Tax Debt Relief
  2.  Benefits of hiring a Tax Debt Relief Company
  3.  Finding best Tax Debt Relief Solution
  4. What you need to know before you hire a Tax Debt Relief Expert
  5. Payroll tax debt relief

IRS Hardship and Future Tax Compliance

Ensuring Compliance During Financial Hardship

When you are under the IRS Hardship Program, maintaining compliance with tax laws becomes even more critical. Here is a detailed exploration of what compliance entails and the consequences of non-compliance:

  1. Timely Filing of Tax Returns: One of the key requirements while under the Hardship Program is the timely filing of all tax returns. This includes filing returns by the due date each year, even if you cannot pay the taxes owed. Timely filing demonstrates to the IRS your commitment to staying compliant and responsible, despite your financial difficulties.
  2. Paying Current Year Taxes: Equally important is the need to pay any taxes due for the current year. The Hardship Program does not exempt you from paying your current tax liabilities. If you accrue new tax debts while under this program, it could be seen as an inability to maintain tax compliance, risking your status in the program.
  3. Understanding Compliance Implications: The rationale behind these requirements is that the IRS Hardship Program is designed to help you manage past tax debts, not to facilitate the accrual of new debts. Maintaining compliance shows the IRS that you are making a good faith effort to fulfill your tax responsibilities, despite past difficulties.
  4. Setting Up Payment Plans for Current Taxes: If you find yourself unable to pay your current year’s tax liability in full, it is important to proactively engage with the IRS. Consider setting up a payment plan or exploring other payment options for the current year’s taxes. This demonstrates your commitment to staying compliant and managing your tax responsibilities.
  5. Impact of Non-Compliance: Failure to comply with these obligations, such as not filing returns or not paying current taxes, can lead to the IRS revoking your non-collectable status. If this happens, the IRS can resume active collection actions, which could include garnishing wages, levying bank accounts, or seizing assets.
  6. Regular Reviews and Compliance Checks: The IRS periodically reviews your financial situation and compliance status while you are in the Hardship Program. These reviews assess whether your financial condition has improved and whether you have remained compliant with tax laws. Staying compliant increases the likelihood of maintaining your non-collectable status during these reviews.
  7. The Role of Tax Professionals: Navigating tax compliance while under financial hardship can be challenging. Seeking advice from tax professionals can be invaluable. They can assist in understanding your obligations, help in filing tax returns, and advise on managing current tax liabilities.
  8. Record Keeping and Documentation: It is advisable to keep thorough records of all your tax filings and payments while under the Hardship Program. This documentation can be crucial during IRS reviews and can serve as evidence of your compliance and commitment to fulfilling your tax obligations.

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Actual Client Results
Client ID Owed Settlement
1-33487 $110,000.00 $3,000.00
1-44337 $22,000.00 $150.00
3-56873 $46,996.00 $2,500.00
3-67895 $97,000.00 $1,800.00
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