What is Tax Relief? Here’s What You Should Know. -

What is Tax Relief? Here’s What You Should Know.

Tax Relief means you pay less tax than the original amount. This program is available for both individuals and businesses. Settling your tax debt with the IRS by claiming the tax relief program you are eligible for may lower your overall tax bill is possible.

In this article, we will explain different programs in the Fresh Start Initiative and how to apply.

What are the different types of tax relief?

IRS Payment Plan or Installment Agreement (IA): A payment plan is an agreement in which the taxpayer and the IRS agreed on payments owed to be paid within an extended timeframe.

Offer In Compromise (OIC): An offer in compromise permits a taxpayer to settle tax debt for less than the total amount owed. If you are unable to pay off your tax balance or if doing so creates a financial hardship then considering this program may be right for you. The IRS generally approves an OIC when the amount offered represents the most the IRS can expect to collect within a reasonable time period.

Penalty Abatement (PA): Everyone is entitled to one mistake and even the IRS understands that. The first time penalty abatement is an administrative waiver that the IRS grants taxpayers relief from failure to pay and failure to file but you must be compliant and current with all tax filing before the IRS can determine your qualification.

Currently Non-Collectible (CNC): Owe the IRS back taxes but can’t afford to pay them back? Currently, Non-Collectible can be useful for a taxpayer wishing to negotiate their responsibility to pay off owed taxes. A CNC will put a hold on the IRS’s aggressive collection tactics.

Fresh Start Program

The Fresh Start Initiative is designed for American taxpayers behind on their tax payments. This Program is exclusive for taxpayers that are in financial difficulty. This program includes four main programs: Offer In Compromise, Currently Non-Collectible, Penalty Abatement, and an Installment Agreement. These programs are meant to ease your financial strain and in some cases can technically settle your tax debt for less than the amount you owe.

Offers in Compromise can be one of the best solutions for a taxpayer in debt, however; qualifying is generally considered difficult. The IRS offers a pre-qualifier tool that can be a useful resource for someone considering an OIC, you’ll also need Form 646-B

If applying for an OIC and the 32-page document is stressing you out, hiring Fresh Tax Solutions is a great option. We are a team of Tax Resolution Experts and will work with the IRS on your behalf and can help determine an appropriate offer.