The IRS is very proactive when it comes to collecting tax revenue. Don’t think for a moment that any tax debt may go unnoticed. In fact, tax debt will always land you in problems unless you take practical steps to manage it. You may also end up accumulating interest and penalties on any outstanding tax debt. So, you need to start looking for solutions to the tax debt problem as soon as possible.
The good news is that tax debt relief options are available for deserving individuals. However, you need to apply for the right option to increase chances of success. It is recommended to seek professional guidance and expertise in this regard. At the same time, you should be aware of basic information regarding tax debt relief. This article helps you understand this crucial aspect of your tax debt relief journey.
So, let’s see what types of tax debt reliefs are available in Pomona, CA.
See What Types Of Tax Debt Reliefs Are Available In Pomona, CA
Installment Agreement:
This option allows taxpayers to pay their tax debt in monthly installments over an extended period. The IRS offers different types of installment agreements based on the amount owed and the taxpayer’s financial situation.
Make sure you are financially able to meet your installments liability. Failure to pay installments could create more problems for you.
Remember that you may still have to pay interest on the outstanding amount.
Offer in Compromise (OIC):
An OIC is an agreement between the taxpayer and the IRS to settle the tax debt for less than the full amount owed. This option is typically available if the taxpayer can demonstrate financial hardship.
As a taxpayer, you need to prove your inability to pay full tax amount. Make sure to take account of all your assets and liabilities, and provide appropriate documentation.
Once the IRS agrees, you should make the agreed amount within the provided time limit. Often regarded as one of the most suitable options, remember that it is not for everyone. The success ratio for OIC is not very encouraging. So, apply for it only if you have a legit case.
Currently Not Collectible (CNC) Status:
If the taxpayer is facing extreme financial hardship they may qualify for CNC status. You need to prove that you are actually unable to pay tax liability despite your best efforts.
The IRS may demand additional documentation before it decides on your case. This temporarily suspends IRS collection activities until the taxpayer’s financial situation improves.
You may have to pay the full amount once your financial status improves.
Penalty Abatement:
In certain cases of tax debt, taxpayers may be eligible for penalty relief. The IRS can waive or reduce penalties associated with late payment or filing.
The taxpayer needs to demonstrate reasonable cause for the delay. This may include unavoidable medical emergencies or death.
Innocent Spouse Relief:
This option is available to individuals who filed a joint tax return with their spouse or former spouse. You need to prove that you should not be held responsible for your spouse’s actions or misreporting.
It is crucial that you take account of all options, and decide the one that is deemed most suitable. Don’t go for the option that minimizes tax amount, but where you have higher chances of success. The fact of the matter is that the IRS is experienced enough to see through any misrepresentation. In fact, any false statement of forgery may lead to further penalties. So, make sure to understand all relevant rules and requirements before you apply for any of the above options.
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Zee Maq is a content writer who specializes in writing business and finance content. She has nine years of experience and loves to provide problem-solving content to help people tackle challenges in their everyday lives.