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Demystifying Tax Relief: How It Works and Top Options

If you received a shocking letter from the IRS saying you owe back taxes or made accidental errors on business tax returns leading to major penalties, you likely feel overwhelmed and urgently need solutions.

Thankfully, you can get tax relief through various programs and representation options allowing you to:
  • Greatly reduce tax debts
  • Spread payments over 6 years
  • Pause IRS collections
  • Settle for less than you owe

But what exactly is tax relief and how do you get it? This guide breaks down key information to utilize tax relief options and take control of IRS issues.

What is Tax Relief?

Simply put, tax relief refers to IRS programs and services providing taxpayers ways to resolve unpaid tax bills, penalties, interest charges and ongoing issues with the tax agency.

Instead of facing full forced collections like wage garnishments or property seizures, tax relief gives multiple strategies to become complaint while alleviating financial hardship.

The most common tax relief solutions include:

  • Payment plans spreading debts over 72 months
  • Penalty abatements removing failure-to-file penalties
  • Currently Not Collectible status pausing IRS collection efforts
  • Offers in Compromise settling tax debts for less than what is owed

Now let’s explore key types of tax relief in more detail…

Tax Relief Option 1: Installment Agreements

IRS installment agreements are payment plans allowing you to pay off owed taxes slowly over time instead of demanding one lump sum.

Benefits include:

  • Repaying in affordable monthly installments as low as $50
  • Halting IRS collections like bank levies as long as you pay each month
  • Spreads payments across up to 6 years providing financial breathing room

The IRS typically approves installment plans for those owing under $50,000 in back taxes. You must file any delinquent returns to qualify and interest/penalties continue growing during the payment duration.

Tax Relief Option 2: Offer in Compromise

An IRS Offer in Compromise allows settling tax debts, including interest and penalties, for considerably less than the amount due. It provides a fresh start for taxpayers lacking the means and assets to fully repay in a reasonable time.

However, approval only applies to cases where:

  • Taxpayers lack income and assets to fully repay tax debts before 10 year collection statute expires
  • IRS analysis determines accepting a reduced offer is their best option for eventually colleting something

Strict eligibility rules must be met requiring detailed financial disclosures and forms. Our tax experts guide clients through this intensive 6 month process. Only small percentages get approved but enlisting representation maximizes your chances.

Tax Relief Option 3: Currently Not Collectible

Taxpayers experiencing extreme economic hardship making it impossible to repay any owed tax debts qualify to be deemed Currently Not Collectible status by the IRS.

This pauses IRS collection efforts including:

  • No garnished wages, seizures or levies
  • Currently Not Collectible status stays on record preventing most IRS actions
  • Future refunds offset to pay down liability

Collections eventually resume if finances improve so this short-term fix works best as part of a bigger tax resolution strategy. Our tax pros help clients navigate reapplying every year.

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When Tax Relief Requests Get Denied

Unfortunately even working with representation, not every tax relief application succeeds – especially for newer, lesser known IRS settlement programs. Reasons for rejection might include:

  • Failure providing full financial disclosures
  • IRS determines taxpayers can fully or partially repay debts
  • Tax pros request types of relief unqualified for

Getting requests denied leaves you no worse off than before applying. Our experts simply reassess and identify alternative tax resolutions addressing what caused the rejection. Persistence and exhausting every option ultimately produces successful tax relief.

DIY Attempts Rarely Produce Tax Relief

Navigating applications for installment plans, penalty abatement requests, proving eligibility for Currently Not Collectible Status, building strong Offers in Compromise and understanding rejection rationales requires extensive IRS procedural knowledge and negotiating experience.

Taxpayers acting alone easily make mistakes lowering approval odds for tax relief programs providing the most savings off owed amounts. Hiring representation maximizes relief outcomes.

The Value of Tax Relief Firms

The benefits of enReputable tax relief companies like Tax Help Associates leverage competent tax attorneys, CPAs and former IRS agents with the skills to quickly:listing professional tax help for veterans includes:

  • Accurately calculate total IRS tax relief debts owed
  • Assess eligibility for tax relief programs clients qualify for
  • Compile thorough applications and financial statements
  • Negotiate with IRS staff securing maximum tax forgiveness

This consolidated tax and legal expertise facilitates biggertax burdens removed through tax relief programs.

Take Control of Your Tax Situation

If you need assistance getting tax relief from large IRS tax debts, our tax relief professionals will fight to resolve your situation and eliminate stress around uncertain IRS collection efforts. Contact us today for a Free Consultation to discuss your situation!

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