If you have tax problems, you know as well as anyone that it’s not a pleasant feeling. It doesn’t matter whether you owe a lot or just a little, not only is it troubling to know that the government is after you, but there are also fines and penalties that can make your original tax bill seem miniscule to consider. The good news is that regardless of where your tax debt is coming from, there are methods of tax relief that you can use to give yourself a considerable break. This article will give you a brief rundown on what methods are available to those looking for help.
Obeying the Law
It might come as a surprise, especially to those who watch the evening news, but not only must you obey the law when you pay your taxes, but thanks to a rash of laws recently enacted, so must the government. Plainly stated, thanks to the new IRS Fresh Start Tax Initiative, there are new guidelines that give tax payers considerable leeway when it comes to what they must pay. For example, jobless taxpayers have a six-month extension to pay their taxes starting from 2011, and this law forgives penalties against those taxes as long as the tax and interest are paid. This is a huge benefit those who qualify since penalties on unpaid taxes are among the biggest issues facing those with an overdue tax bill.
The government is a finicky taskmaster. If you don’t believe that, try talking about paying your tax bill in installments. If you present a good faith effort to pay your taxes, the government will usually take your word for it that you are trying your best to pay what you owe. Try it. You’ll be surprised.
That’s right. Just offer a compromise. Beginning with the first round of Fresh Start in 2011, the IRS began settling for amounts from taxpayers that were far below what they originally owed. The effort is called an Offer in Compromise (OIC) and it is an agreement between the government and the taxpayer to take a more common-sense approach to paying the amount of the tax owed. Generally speaking, if the government believes that a taxpayer has the ability to pay what they owe, they will be far less inclined to compromise, but otherwise they will look for a resolution.
Often, as hopeless as a bad tax situation may seem, there are a lot of options available to those who are not, for whatever reason, able to pay their taxes. Of course, the best and first option, is to speak with the tax authority to whom you are in debt. Got a problem, talk to them. An important secret to remember is that tax authorities don’t want to deal with these situations any more than you do. If you can show them that you are making a concerted effort to pay your taxes, they will be quick to respond to your efforts. Or as the old saying goes, ask and it shall be given.
See also – Tax Relief in Disaster Situations