Do you have an IRS tax bill this year? Tax relief may enable you to divide your debt into manageable installments or lessen the amount of tax you owe the government. No, tax relief will not eliminate your tax bill—in fact, it may cost you more in the long run—but it may make paying what you owe the federal government much more reasonable.
What exactly is tax relief?
Tax relief is establishing a payment plan or reaching a settlement with the IRS, rather than wiping your tax liability. Rather, it is about making it simpler to pay off your tax obligation.
Natural catastrophe victims, such as hurricanes and wildfires, are occasionally given additional tax breaks. Disaster survivors may be eligible for deadline extensions and to claim casualty losses on their federal income tax returns. The IRS website has further information about special tax relief.
Methods of obtaining tax relief
There are numerous techniques for handling taxes that you cannot afford to pay in full when they are due. Here are four options to examine.
• Make a compromise offer
If you are unable to pay your whole tax obligation, the IRS may enable you to settle your tax liability for less than you owe by submitting an offer in compromise. According to the IRS, an offer in compromise “may be a reasonable choice if you are unable to pay your entire tax debt or if doing so would cause financial hardship.” the IRS will examine the following elements while considering your application for an offer in compromise:
• Your capacity to pay
• Your earnings
• Your spending
• Your assets
Check out the IRS offer on the compromised website to see whether you qualify to settle your tax obligation for less. To validate your eligibility and construct your preliminary proposal, you may also utilize the online offer in a compromise pre-qualifier.
• Penalty relief or interest reduction
There’s a possibility you’ll qualify for IRS penalty reduction. This implies that if you satisfy specific requirements, such as not having any penalties for the previous three tax years or paying or arranging payment for any taxes owing, the IRS will forgive the penalties on your tax bill. Even if you qualify, you will still owe taxes, but your total debt will be smaller after the penalties are deducted from your current sum. For further information, see the IRS’s penalty relief guide. Interest abatement, or forgiveness of the interest you owe on delinquent taxes, may also be granted, although it is uncommon.
• Individual loan
If you don’t have the cash to pay your tax obligation, you might consider taking out a personal loan. Before choosing this route, see whether you can get a personal loan for cheaper than the IRS payment plan offer. If you decide to utilize a personal loan to pay your tax due, make sure you shop around for the cheapest lending rates and conditions. Checking your credit reports before applying might also help you understand what lenders will notice when they assess your application.
What about tax relief firms?
The Polston Tax is a tax relief scheme that helps businesses to reduce their tax bill. It does this by providing a discount on the amount of tax that a business pays, based on the type of company it is.
Tax relief organizations often market their services to suffering taxpayers through the internet, radio, and television. Tax relief firms essentially function by negotiating with the IRS on your behalf for a charge. That price may run into the hundreds of dollars, with no guarantee of success over negotiating with the IRS on your own.