Who qualifies for Tax Debt Relief?

March 21, 2024 by Kate Ferreira
Tax Relief written on a Calculator

If you have questions about tax debt relief, you’re in the right place! Below, we will dive into facts about tax debt and options that are available.

First, it is important to understand that if you have tax debt, you are not alone – we have helped over 350,000 clients who have tax issues similar to yours. Additionally, there are more than 14 million Americans who owe the IRS some type of debt, and an additional seven million or more who have unfiled tax returns. Fortunately, there are a myriad of procedural and potential litigation tools available for taxpayers who want to tackle their tax debt issues and dispute the collection actions taken or about to be taken by the IRS. This is when hiring a tax professional might be beneficial if you are unsure about which route might be the best to take!

But let’s not get ahead of ourselves. First, let’s talk about some issues taxpayers face and the options that may be available to them.

Some types of tax issues taxpayers face are:

 


Relief for these issues include installment agreements, offer in compromise, and audit reconsideration. Based on their specific circumstances, some taxpayers may qualify for Innocent Spouse Relief or Currently Not Collectible status.
 

When should I pay the balance in full?


If you believe that you owe the IRS the amount they are claiming and you are able to pay the amount that is due, the best option may be to pay the liability in full. This is because the longer the liability remains unresolved, the more penalties and interest the IRS is able to add to the initial amount due. However, this option is not always doable for many taxpayers, as many cannot pay the liability in full or, if they paid the liability in full, it would cause them severe financial hardships.
 

What if I cannot pay the balance in full but owe the amount that is due?


If you cannot pay in full, or if it's not the best option, another option taxpayers have is an installment agreement. An installment agreement is a payment plan that taxpayers can set up with the IRS and that allows them to pay the taxes they owe over time.

There is also an option to enter into an Offer in Compromise (OIC). If approved, this option allows a taxpayer to settle their debt with the IRS for less than what was originally owed. OICs are usually approved by the IRS when the taxpayer can show that paying the full amount due would create financial hardship.

These are just a couple of examples that are available to taxpayers when they have tax debt looming over them. However, it is important to keep in mind that everyone’s tax situation is completely unique, which is why we recommend speaking to a tax professional about your specific case so they can determine the best course of action for you.

If you are interested in speaking to one of our tax professionals about your tax debt relief options, click here. If you are interested in learning more about who qualifies for tax debt relief, please review the video below.

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Kate Ferreira
Communications Associate

 

Kate Ferreira is a Communications Associate with TaxAudit. A California Tax Education Council (CTEC) registered tax professional, Kate has been with the organization since 2015. Kate enjoys the challenge of writing about complex issues – including taxes. Outside of work she enjoys traveling, listening to vinyl, and going on adventures with her dog, Indiana Bones.


 

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