Are you worried about hefty tax liabilities lingering over your head? The IRS imposes penalties and enforces collection actions on people and organizations who owe taxes, which further increases the tax debt burden. To assist taxpayers in lowering their tax liabilities and fulfilling their tax obligations, the IRS also offers various tax debt relief programs and initiatives. Here are the tax debt relief programs that help in IRS tax problem resolution.
What is Tax Debt Relief?
Tax debt relief refers to relaxations that lower a taxpayer's tax burden or help them with their tax obligations. It includes several tax relief options that help struggling taxpayers with IRS tax problems.
Tax Debt Relief Programs
Installment Agreements
When the IRS agrees and allows you to pay back your taxes in installments over an extended time, it is called an installment or payment agreement. To be eligible for a long-term payment plan online, you must owe $50,000 or less in total taxes, fines, and interest. You will be required to pay monthly installments for over 180 days until paid in full. For a short-term payment plan online, your tax obligation should be as much as $100,000 and you have to pay on or before 180 days.
Innocent Spouse Relief
Innocent spouse relief enables joint tax filers to avoid paying additional taxes, interests, and fines if they were the victim of tax enforcement actions where a spouse or ex-spouse has failed to report income, misreported income, or claimed tax deductions or credits inadvertently.
Offer in Compromise (OIC)
Taxpayers who would experience severe financial difficulties if they had to pay their tax debt in full may qualify for an Offer in Compromise (OIC). It helps taxpayers to settle their tax dues for less than the original due. It has stringent eligibility and approval criteria and a tax debt lawyer can help taxpayers looking for this problem resolution.
Currently Not Collectible
Currently Not Collectible is a tax debt relief program, which helps suspend tax collection activities on a taxpayer’s account. Applicants need to show that paying off tax debt will make it impossible for them to cover essential living costs. The IRS will freeze all efforts to collect taxes if your account bears that classification. However, your debt won't disappear and penalties and interest will continue to pile up.
Last Word
Federal tax debt is undoubtedly the most terrifying debt you could possibly have. However, with the help of a tax law firm, you can resolve your IRS tax debt problems. If you are looking for a tax attorney in Dallas, Texas, search for a skilled professional who possesses years of experience in negotiating with the IRS on varied tax problems. They will assist you in resolving IRS tax problems and applying for debt relief programs in Dallas.
