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Types of Tax Relief Programs

Some taxpayers find they owe more than anticipated and circumstances may make it impossible to pay their entire tax bill upfront. If you find yourself owing more than you can feasibly afford, there is help available. Tax relief programs are available from the IRS for those needing help getting their tax bill paid without having to pay additional fees and penalties. Many tax relief programs are designed to help reduce the amount owed on your tax bill.

IRS Fresh Start

The Fresh Start Program was introduced by the IRS to make it easier for taxpayers to pay their back taxes. This program helps individuals and small businesses avoid tax liens and continued collection practices. Initially, the program increased the total amount a taxpayer had to owe before a tax lien is applied. Over the years, the Fresh Start Program has been adjusted and expanded to continually help taxpayers. The program has always stayed true to its original purpose. Helping taxpayers get their tax bills paid in an affordable and timely manner.

The Fresh Start Program also helps taxpayers who are in arrears, offering a variety of penalty relief options. One option for qualified taxpayers, who are unemployed, helps them avoid paying penalties. Individuals can apply to have their failure-to-pay penalties waived for up to six months. Those applying for this option must be unemployed for 30 consecutive days and show financial hardship. During their extension, they do not have to pay penalties, however, they are still responsible for any interest accrued.

Some taxpayers may qualify for an extension for filing their annual tax returns. Extensions are approved on a case-by-case basis and applicants must meet certain annual income requirements.

Some taxpayers can avoid having a lien placed against them by getting approved for an installment agreement. This is when a reasonable amount of monthly payments are agreed upon. However, if they default on any payment, the IRS can start/resume collection actions and reapply the lien.

Offer In Compromise

An Offer in Compromise is an agreement allowing taxpayers to settle their liability for less than the full amount owed. The IRS will analyze the ability to pay and come up with a lump sum settlement offer. If agreed upon and paid, the tax bill is considered to be paid in full. To be eligible, an individual must not have a personal or business bankruptcy petition open and all required tax forms must be filed. There are also other requirements, which are based on if it is a business tax bill or an individual’s annual income.

Apply For Fresh Start Programs

While it is never easy owing to the IRS large amounts of money, it is still possible to get the liability paid by avoiding liens, levies, and garnishments. There are programs there to help and ease the stress associated with owing money on your taxes. You just need to make sure you get all the proper forms filed in a timely manner. If you find you are needing help applying for any of the IRS Fresh Start programs, seek the help of a professional tax relief specialist or certified tax resolution company.

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