Tax debt can be a heavy burden, causing stress and financial strain for individuals and businesses. The good news is that tax relief options are available to help manage, pay off, or even settle tax debt. Tax Law Advocates play a pivotal role in assisting individuals and businesses in resolving their tax debt problems, offering relief options and negotiation expertise. In this blog, we’ll explore the various tax relief options and the invaluable role Tax Law Advocates play in this process.
Understanding Tax Debt Relief
Tax debt relief refers to programs designed to aid taxpayers who cannot afford their tax payments or have delinquent tax bills. These programs aim to streamline and ease the burden of debt collection and payoff, providing individuals and businesses a path toward resolving their tax issues. Many of these relief programs are part of the IRS’ Fresh Start program, which seeks to make it more manageable for taxpayers to address their tax debts.
5 Common Tax Relief Options
When facing tax debt, individuals and businesses have several options for relief, and Tax Law Advocates can help navigate these choices. Here are five standard tax relief options:
1. IRS Payment or Installment Plans
The IRS offers payment plans or installment agreements for those needing more time to pay their tax bill. These plans allow taxpayers to pay their overdue tax bills, including accrued interest and fees, over a specified period. There are two types of installment plans available: short-term and long-term. It’s important to note that entering into a payment plan does not exempt taxpayers from interest and penalties for late payments, which continue to accrue until the balance is paid off.
Tax Law Advocates can assist individuals and businesses in determining their eligibility for these plans and guide them through the application process. Additionally, lower-income applicants may have their setup fees waived, making it more accessible for those in financial distress.
2. Offer in Compromise
An offer in compromise is another option for tax relief, allowing taxpayers to settle their back taxes with the IRS for less than the total amount owed. This option is typically considered when individuals or businesses cannot pay their tax debt or doing so would create a significant financial hardship.
However, it’s important to note that getting the IRS to approve an offer in compromise can be challenging, with fewer than half of the requests being accepted. Tax Law Advocates can assess whether an offer in compromise is a viable option for their clients, considering factors such as the ability to pay, income, expenses, and assets. They can also assist in preparing the necessary documentation and guide clients through the application process.
3. “Currently-Not-Collectible” Status
When individuals or businesses cannot pay their taxes and cover their living expenses, they can request that the IRS place their account in “currently-not-collectible” (CNC) status. This status temporarily suspends collection efforts by the IRS and requires the taxpayer to provide financial information through a Collection Information Statement. While in CNC status, taxpayers should know that their tax debt does not disappear, and the IRS can still file a tax lien.
Tax Law Advocates can help clients apply for CNC status, ensuring that they provide accurate financial information and understand that CNC status is a temporary solution subject to periodic review.
4. Penalty Abatement
Penalty abatement is an option for taxpayers with a clean record who have incurred IRS penalties for late filing or payment. Specifically, a “first-time penalty abatement” allows for reversing penalties and associated interest. To qualify for this relief, taxpayers must meet specific criteria, including having filed their current return, paid past taxes, and not having had any IRS penalties imposed during the past three years.
Additionally, the IRS offers penalty relief for reasonable cause, considering life circumstances such as serious illness, family deaths, or natural disasters as valid reasons for late filing or payment. Tax Law Advocates can assist clients in determining their eligibility for penalty abatement and guide them through the application process, including providing evidence for reasonable cause relief.
5. Hiring a Tax-Relief Company
While individuals and businesses can attempt to resolve tax debt issues independently, many opt to seek professional assistance from tax relief companies. These companies offer services to help taxpayers navigate the complexities of tax debt relief programs, including assistance with paperwork and negotiations with the IRS.
Tax Law Advocates, as experienced professionals, can guide whether hiring a tax relief company is necessary for their clients. They can also help clients make informed decisions regarding selecting reputable companies if such services are required.
The Role of Tax Law Advocates
Tax Law Advocates serve as essential partners in helping individuals and businesses resolve tax debt issues. Their expertise extends beyond offering relief options; they provide the following valuable services:
Assessment and Eligibility Determination
Tax Law Advocates thoroughly assess their clients’ financial situations to determine eligibility for various relief programs. This assessment includes a review of income, expenses, assets, and tax history. By understanding their clients’ financial positions, they can recommend the most appropriate relief options.
Application and Documentation
Navigating the paperwork required for tax relief programs can be overwhelming. Tax Law Advocates assist clients in completing applications accurately and ensuring that all necessary documentation is provided. This attention to detail is crucial to avoid delays or denials.
Negotiation and Communication
One of the key roles of Tax Law Advocates is to negotiate with the IRS on behalf of their clients. They communicate with the IRS to secure favorable terms for payment plans, offers in compromise, or penalty abatements. Effective negotiation skills can lead to more manageable repayment terms and reduced tax debt.
Educating and Empowering Clients
Tax Law Advocates empower their clients with knowledge about tax relief options, requirements, and potential outcomes. Informed clients can make decisions that best suit their financial circumstances.
Compliance and Follow-Up
Staying compliant with IRS requirements is essential throughout the tax debt relief process. Tax Law Advocates ensure their clients meet all obligations, including filing required tax returns and making scheduled payments. They also provide ongoing support and guidance, especially for relief options that involve periodic reviews.
A Call to Action: Seek Tax Relief with Tax Law Advocates
Don’t face the IRS alone if you are struggling with tax debt. Tax Law Advocates are here to assist you every step of the way. Whether you need help determining your eligibility for relief programs, negotiating with the IRS, or ensuring compliance, their expertise can make a significant difference in your journey to resolving tax debt.
Contact Tax Law Advocates today at 855-612-7777 or visit their website to learn how they can help you achieve tax debt relief and regain financial stability. Don’t let tax debt overwhelm you; take action and secure your financial future with Tax Law Advocates.
