What Does Tax Relief Mean?
Do you owe more in taxes than you can afford to pay back? Is your tax debt sending you into financial turmoil? If you answered yes to either of these questions, it’s time to seek relief. Some taxpayers may feel nervous or embarrassed by the thought of applying for tax relief services. However, it’s important to remember there are millions of Americans in need of tax debt relief or back tax help. In contrast, not all of these taxpayers will seek tax debt relief or get back tax help. However, that doesn’t have to be you. You can ask for help, and we are here to help. Our team has years of experience providing tax debt relief services to our clients throughout the country. If you are in trouble with the IRS, we can help settle back taxes. The most important thing to remember is to act and act now.
How Does Tax Relief Work?
While the IRS may seem like a scary government organization, they can actually be very helpful. For instance, the IRS provides several relief options to taxpayers looking to settle back taxes. In contrast, not many Americans realize that these tax relief options are available to them. Some taxpayers may simply think they’ll ignore their problems and they’ll go away. However, it’s important to remember that the IRS never goes away. The only way to get the IRS off your back is to settle your back taxes. Likewise, the only way to settle back taxes is to ask for help. Tax debt relief essentially allows you, the taxpayer, to pay back taxes in an affordable way. The IRS understands not everyone has the ability to pay back taxes in one lump sum. For that reason, they created programs like the Fresh Start Initiative to help out taxpayers in need.
IRS Installment Agreement in Tax Relief
With an IRS Installment Agreement, the IRS allows you to pay down your full balance in small payments.
- For instance, a long-term payment plan allows you to pay over 120 days or longer. However, you must owe $50,000 or less to qualify for a long-term payment plan. This total includes combined taxes, penalties, and interest.
- Additionally, the IRS offers a short-term payment plan to settle back taxes in less than 120 days. In contrast, your tax debt can be as high as $100,000 to qualify for a short-term installment agreement.
Offer in Compromise in Tax Relief Services
If you need tax debt relief and your debt is too high, you can apply for an Offer in Compromise. In this case, you make an offer to the IRS to settle your tax debt for less. However, not all taxpayers qualify for an Offer in Compromise. You may get approved for this relief program if you can prove paying back taxes would cause financial hardship. According to the IRS, an OIC may be a “legitimate option if you can’t pay your full tax liability.” Additionally, the IRS adds you may qualify if “doing so creates a financial hardship."
What does the IRS Use to Consider an OIC?
When considering if a taxpayer qualifies for an Offer in Compromise, the IRS will look at several factors. These factors for determining eligibility include:
- The taxpayer’s ability to pay
- A taxpayer’s total income
- Your total expenses
- A taxpayer’s assets
The IRS also has an online Offer in Compromise Pre-Qualifier to help you determine if you may be eligible.
Penalty Abatement or Interest Abatement
Another tax relief service the IRS offers is penalty abatement. In this case, the IRS will forgive the penalties you’ve been charged on your taxes if you meet specific criteria. For example, you must not have any penalties for the past three tax years. Additionally, you must be currently paying or have arranged to pay, taxes owed. Even if taxpayers qualify for penalty abatement, they still owe taxes. However, their overall tax debt will be lower once the penalties are moved from the outstanding balance. Additionally, in some cases the IRS will forgive any interest charged to your tax debt. However, interest forgiveness is a hard relief option to come by. In other words, taxpayers are usually still liable for interest owed when they settle back taxes.
We know that adding on tax resolution services fees can be hard when you owe back taxes. However, you don't have to worry—we have financing options. At FinishLine Tax Solutions, we want to make it easier than ever for you to settle tax debt. Therefore, we offer special financing options for our clients to help ease the burden of tax resolution service fees. With our financing options, you can get the help you need without adding more financial stress to your life. Furthermore, we offer flexible financing options that work for you. Paying back taxes is already stressful enough. Let our financing options ease the burden for you.
IRS Fresh Start Program
Another tax relief initiative from the IRS is the Fresh Start program. While the Fresh Start program encompasses other relief initiatives, it’s mainly for certain taxpayers who owe less than $50,000. The Fresh Start program also helps people avoid some parts of owing tax debt, including:
- Tax liens
- Seizure of assets
- Wage garnishments
Here are the relief options under the Fresh Start program.
Offer in Compromise
As we mentioned above, an Offer in Compromise deal is also part of the IRS’ Fresh Start program. However, an Offer in Compromise deal isn’t as common to come by as a payment agreement. Though it is possible for taxpayers to pay off what they owe through an Offer in Compromise deal.
Extended Installment Agreement
The first payment option, and most popular, is the extended installment agreement. This program is designed for people who owe less than $50,000. Additionally, it gives taxpayers up to six years to pay off what they owe without interest or penalties. Likewise, this payment option stops IRS collection activities, including wage garnishments, tax liens, and asset seizures.
Fresh Start Repayment Options
The IRS offers three repayment options to taxpayers under the Fresh Start program. Additionally, all three options allow people to pay off tax debts affordably. Similarly, these payment options allow taxpayers to avoid further penalties and interest that can cause more financial hardship.
Tax Lien Withdrawal
The last Fresh Start program tax relief option is a tax lien withdrawal. Taxpayers can get tax debt relief by offering to pay off their entire tax debt through direct debit. Additionally, this program successfully withdrawals any tax liens the IRS have placed on your account.
Do Tax Relief Companies Work?
Tax relief companies can be extremely helpful when it comes to seeking tax debt relief. Likewise, a tax relief company can help you settle back taxes for less. For instance, a tax relief company employs individuals with years of experience negotiating with the IRS. While there is a fee to work with a tax relief company, your odds of a better outcome are greater. When you hire a reputable tax relief company to work for you, they deal directly with the IRS. In other words, a tax relief company negotiates an Offer in Compromise, Installment Agreement or penalty or interest abatement. One of the benefits of working with a tax relief company is you don’t have to deal with the IRS. If you are ready to get on the road to tax relief, call FinishLine Tax Solutions today. Our team of tax relief services experts is waiting for your call.
What does Currently Not Collectible Mean?
Currently Not Collectible is a status a delinquent taxpayer can have with the IRS. However, you can only get this tax relief if the IRS determines you can’t financially settle back taxes. With Currently not Collectible status, the IRS temporarily pauses any active collections actions against the taxpayer. For instance, Currently not Collectible will stop:
- Bank levies
- Threatening letters and calls from the IRS
- Other collection enforcement
In most cases, the IRS won’t grant Currently Not Collectible status to a taxpayer until they’re compliant. Likewise, to qualify for CNC tax relief, taxpayers must demonstrate financial hardship. The IRS determines financial hardship by not being able to settle back taxes after paying for basic living expenses. According to the IRS, the taxpayer must demonstrate a severe economic disadvantage. In other words, the IRS will not accept a simple mild inconvenience. However, whatever your case may be, call us today for back tax help.
Low Income Tax Relief
Many Americans seek tax relief services every year. For some Americans, their debt is too large to pay back in one lump sum. However, for other taxpayers, they will never be able to settle back taxes in their lifetime. For this reason, the IRS also offers tax relief options for low-income individuals. One example of tax relief services for low-income taxpayers is Currently not Collectible status.
Does Tax Relief Mean I Pay More?
Generally speaking, when we say tax relief, it means you’re getting relief from the burden of your tax debt. However, it doesn’t mean that your tax debt will totally go away. For instance, if you owe the IRS $50,000 and cannot pay it back, you have options. First, you can apply for an Installment Agreement and pay the tax back in payments. Second, you can apply for an Offer in Compromise. The latter tax relief option will actually reduce the amount of tax debt you owe. For example, if you owe the IRS $100,000 and cannot pay it back, you can settle for less. In other words, you can make a deal with the IRS to reduce your total amount to half. For example, in some cases, tax relief companies have negotiated down to nearly 80 percent of the tax debt.
What Does The IRS Consider Low Income?
The IRS typically considers low-income individuals to be those who can’t settle back taxes. However, this definition isn’t totally black and white. For example, some taxpayers can’t settle back taxes in one lump sum, but they can make payments. In contrast, some taxpayers have absolutely no money left to settle back taxes once they pay for basic living expenses. The taxpayers in the latter category are typically the ones the IRS considers low-income. However, the IRS doesn’t throw out the term “low-income” lightly. In other words, taxpayers must prove their eligibility before the IRS will consider them to be a low-income taxpayer.
Who Qualifies for Tax Relief?
It’s possible that nearly any taxpayer will qualify for tax relief services. However, there are criteria the IRS sets in motion depending on income levels. For example, a taxpayer making $150,000 a year may qualify for different tax relief than a taxpayer making $60,000. The best way to determine if you qualify for tax relief is to consult with a tax relief services professional. For example, the professionals at FinishLine Tax Solutions have years of experience helping their clients settle back taxes. Many taxpayers across the country may feel like their debt is too high and there’s no hope. However, FinishLine Tax Solutions wants to remind them that there is hope. While tax debt relief differs for everyone, we believe that everyone should be eligible to seek tax relief. We'll get you the back tax help you deserve.
How Can FinishLine Tax Solutions Help Me?
If you want to settle tax debt, now is the time. For example, if you owe more to the IRS than you think you can pay, call us at FinishLine Tax Solutions. Our team of tax debt relief experts can help you get out of tax debt for good. We have years of experience dealing directly with the IRS. In other words, we know how to deal directly with this challenging government organization. Most importantly, we understand how important it is to remain in good financial standing. It’s hard to plan for the future when you have a mountain of tax debt weighing over your head. Well, we say it’s time to climb that mountain. Call us today and we’ll get you on the road to financial freedom. Our team has the experience to get you to the finish line. Call us today for back tax help.
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