The IRS Debt Relief Program (Debt Forgiveness Program) is a type of arrangement for taxpayers with unpaid taxes. But the person has to get professional assistance to get the forgiveness. The circumstances surrounding the unpaid debts will get thoroughly examined by the professionals. It will make a person qualify for IRS Tax Debt Relief Program. You can have a look at what every person must know about IRS debt forgiveness.
There are some several forgiveness and relief options avaibale. One of the options is Installment Agreements (IA) that helps the taxpayer to pay down the tax debt. Then the typical repayment period for this repayment option is seventy-two months. This option is available for those who have to pay less than $50,000.
Also, there is Innocent Spouse Relief that helps the applicants to avoid penalties. The third is the Offer in Compromise (OIC) which is a settlement option that helps the payers to pay back less than they owe to the IRS. Then the fourth option is the Currently Not Collectible (CNC) which is a status that acts as a clean state program. This will aid people who find it hard to pay back the tax to the IRS. Eventhough these options are available a person has to qualify for these options first to benefit from them.
Table of Contents
How Does Tax Debt Forgiveness Work?
A person has to use his or her financial situation to know what kind of forgiveness plan they qualify for. These are some of the steps which can help you to know how tax debt forgiveness works. Also, the IRS will say how much a person needs to pay based on their financial situation and the status of their debt.
- A person has to apply and accept the correct program.
- Then a person has to accept to stay up to date for the tax returns to go forward.
- The taxpayer has to agree to the terms of the IRS such as due, payment terms and penalty abatement.
- They have to agree to the IRS when they reassess their financial status.
- They need to pay the full or the altered debt amount through the payment plan.
Should you hire a tax debt relief firm?
If a person owes the IRS lots of money, then they may try to hire a tax debt relief firm. But is it a great option to follow? You have to know the amount of money you owe to the IRS and if you owe lots of money then the matter is serious. So if you need a way out of this you can choose the option of hiring a tax debt relief firm. They will offer some extra help to you. Furthermore, know when to hire a debt firm to resolve the issue.
If you do not have the money to pay back the bill, then you may get anxious. So a tax debt relief firm will help you to know what options are available to relieve you of the debt. Get help soon if you cannot manage on your own.
How to verify a tax debt relief firm (Legitimate or a scam)?
There are lots of companies that look good on the outside however full of scam when we get to know more about them. That is why to be always on the safe page you have to check whether the relief firm you are going for is legitimate or scam. Many of such companies ask the payer for nonrefundable fees and they promise a lot. But after that they do not keep their word. Also, the scam companies know that the payer will be desperate to pay the money back to the IRS so they will manipulate the situation.
Here are some of the things that will help you to identify the scam.
- The firm might guarantee debt forgiveness.
- They may give lots of promises to make the debt vanish.
- Then they may pledge to remove the penalties and interests.
- They will fail to make a thorough examination of the payer’s financial background.
- They may use some methods to delay the case.
- Making the payer wait for a long time and then saying that they do not qualify for the debt.
- They will manage the case with letters and emails.
What happens if you don’t file taxes for several years?
Many people find it easy to simply forget about the taxes so they do not file taxes for many years. Then they may get stuck without knowing what to do. But it is not good to miss the deadlines. They may try to forget it but in the end, they will be in a lot of trouble. Here are some of the issues you might experience if you do not file the taxes.
1. Paying the taxes will become even harder
Paying taxes is hard but when you procrastinate to file the taxes then it will become harder to escape. The IRS will receive details about all the tax payments. So if you do not file the tax they will come to know about it eventually.
2. Lots of stress
If you fall behind on the bills it can be really frustrating and also stressful. You may have to go through several processes to file the taxes and also pay them.
3. Extra problems
If you do not file, the taxes on time you can end you paying more tax. This has happened to many taxpayers. Therefore, to avoid getting penalised you can complete the job as soon as you can.
Conclusion
The IRS tax debt relief program will be helpful to you if you want to pay the tax debts. You have to know more about these programs and the options they offer to lead a smooth life.
Also read: Here’s Why Tax Saving is Essential To Increase Your Investments
