A guide on tax debt forgiveness programs

Paying taxes can be complicated. Sometimes there can be a delay in paying taxes due to various financial liabilities. Failing to pay taxes can add to the overall debt. The IRS has introduced tax debt forgiveness programs for such taxpayers. The following article sheds light on various tax debt forgiveness programs and companies that offer them.

Tax debt forgiveness by IRS
The following IRS tax relief programs can help in paying the remaining taxes.

• An installment agreement
  This program is available for individuals who cannot pay their tax debt at once. It allows making smaller monthly payments until the entire debt is paid. Under its Fresh Start initiative, the IRS has increased the threshold for installment agreements from $25,000 to $50,000 and the maximum repayment term from five to six years. It also allows online applications for taxpayers who owe less than $50,000.
• An offer in compromise
  OIC or Offer in Compromise allows taxpayers to permanently settle their tax debt for less. However, this program is limited only to individuals under special circumstances or financial hardships. IRS has also expanded its OIC program to cover a larger group of taxpayers that are going through financial hardships. It is important to keep in mind that it is completely the IRS’s discretion to permanently settle tax debts.

No funds to pay the minimum tax debt
Individuals with zero balance in banks and investment accounts are listed as ‘Currently Not Applicable’ by the IRS. In such cases, the IRS might limit some of the expenses like maximum allowable car loan payment of $500 per month. The IRS reviews the eligibility annually, and it uses your future tax refund to pay for the tax debt until it is paid in full. Although very unlikely, the IRS might write off remaining taxes and penalties due to the statute of limitations for individuals who remain in CNC for ten years.

Filing for taxes and applying for tax debt forgiveness can be tricky. A single irregularity or discrepancy in filing can mean failure to procure debt forgiveness from the IRS. Hence, tax experts recommend using the following tax relief companies.

• Fortress tax relief
  The tax relief company is known to resolve tax debts for businesses and individuals. It is one of the few companies that has an hourly-based fee structure and handles tax debt forgiveness cases in all 50 states. It offers services in OIC, penalty abatement, installment agreement, innocent spouse tax relief, and business tax relief. However, individuals must have over $10,000 in tax debt.
  
• CommunityTax
  It is one of the few tax relief companies that offer services for the minimum tax debt of $5000. An IRS-approved tax relief company, CommunityTax, offers services for OIC, installment agreement, streamlined installment agreement, partial pay installment agreement (PPIA), and penalty abatement.
• Anthem Tax Services
  Started by licensed tax professionals, Anthem Tax Services has over 30 years of experience in tax law and tax preparation, offering consultation in all 50 states. The company is accredited by both, National Association of Tax Professionals (NATP) and the National Association of Enrolled Agents (NAEA). However, it offers services in tax debt resolution in the form of the installment agreement, OIC, and penalty abatement.

If one has trouble meeting tax obligations, then one must contact an IRS representative, state comptroller, or a qualified agency for collection alternatives. Be wary of tax relief companies that assure to “qualify” you for a particular tax relief program or resolve your debt without knowing your financial and taxation status. Only the IRS and state comptroller can determine if a particular individual qualifies for tax debt forgiveness.