Tax debt can be burdensome. Tax relief and tax forgiveness can offer you a solution.
Financial hardships can be challenging. When you cannot pay your taxes, it only adds to the amount of stress and frustration. Fortunately, you may qualify for tax forgiveness or tax relief from the Internal Revenue Service (IRS). These programs can considerably reduce the amount of taxes you owe to the government. In this guide, you will learn about tax forgiveness, your eligibility for tax forgiveness, how to apply for tax forgiveness, and which companies can help you with tax forgiveness and tax relief.
What Is Tax Forgiveness?
Tax forgiveness is an IRS program falling under the Offer of Compromise. An offer of compromise is an arrangement with the government allowing you to pay back only a portion of your taxes and settle your outstanding debt. You can reduce the amount of taxes you owe, and the IRS can receive a significant amount in payment.
The IRS and financial companies working with the IRS offer tax forgiveness and tax relief programs. Other measures include installment agreements, currently not collectible (CNC) statuses, and tax credit programs. If you do not qualify for tax forgiveness, you may find assistance through one of these options.
Do You Qualify for Tax Forgiveness?
To qualify for tax forgiveness, you must meet strict requirements set by the IRS. The primary qualification states that you must owe the IRS $10,000 or more in back taxes or taxes you have not fully paid from the previous year. If you owe less than this amount, you may wish to pursue another tax relief measure to reduce your burden.
The second requirement for tax forgiveness is that you do not have the means to pay back the taxes. The IRS has full rights to determine if this is the case based on your income, expenses, and assets. Typically, they will go through your income and asset records to determine what you could reasonably pay back.
There are also small requirements deeming if you would be eligible:
You must have filed all your federal tax returns
You have successfully made all your estimated tax payments
You are not in an ongoing bankruptcy proceeding
Who Offers Tax Forgiveness?
Although the IRS oversees and makes the final decisions on tax forgiveness and tax relief, you may find qualified institutions helpful during the process. With tax debts of $10,000 or less, it is easier to deal with the IRS directly, as you will most likely have an installment agreement. If you have a tax debt of $10,000 or more, or a more complex case, a professional can negotiate with the IRS on your behalf. They may be able to garner a significantly better deal, as they have expertise and experience in the business.
Find the most popular companies working with tax relief and forgiveness below.
SuperMoney is a tax relief firm focused on finding the best tax solutions for its clients. They have professional CPAs and tax attorneys on staff, ensuring you leave your consultation informed about your tax situation, options, and the best course of action. If you do not qualify for tax forgiveness, they will also tell you which tax relief programs may help you solve your tax problems or challenges.
Anthem Tax is interested in providing fair and honest tax services. They not only help find tax relief measures that work for you, but they can also help with tax preparation and understanding of taxes. One of their best features is providing upfront pricing and discounts on services.
Tax Relief Advocates offer a wide range of tax troubleshooting services. They find out the best way to solve your tax debt, whether tax forgiveness, installment agreements, or any other program falling under IRS tax relief. They are well-known for their tax preparation and late tax return help, serving individuals, small businesses, and even self-employed workers.
Precision Tax Relief is one of the most popular tax relief firms. The American Society of Tax Problem Solvers recognized their CPAs as qualified and capable of solving many tax problems. Additionally, their flat rates and their 1-month money-back guarantee showcase their competency.
Enterprise Consultants Group may be your best option if you run a business. They focus their expertise on tax relief for small-medium-sized companies, such that you can trust their competency when negotiating with the IRS on your behalf. They can even help you with tax-related business processes such as payroll, accounting, licensing, and more.
How to Apply for Tax Forgiveness
If you prefer to deal directly with the IRS for tax forgiveness, the application process is lengthy. You will need to gather specific information before filling out and sending your application, including income, credit score and limit, investments, assets, debt, and average expenses. It is crucial to remember that the IRS may not consider all your costs necessary, such as private school tuition, donations, or unsecured debt.
You will need to fill out specific forms to submit a complete application. Most individuals must complete and submit Form 433-A and 656. If you own a business, you will need to complete 433-B. You will also need to send an application fee of $205 unless you meet the qualifications for low-income certification.
There may be other requirements, depending on your situation. Furthermore, if, after submission, you receive any requests for additional forms or documentation, you will need to return the information within the specified time frame. If the IRS accepts your application, you will need to pay all estimated tax payments on time, or the IRS may default on your offer. If you default, you will be liable for the original debt and all interest.
It is easier to seek advice and assistance from a tax relief firm or company in most cases. They can determine if you are eligible for tax forgiveness before submitting your application. They can help put together a proper application and negotiate an excellent deal for you.