IRS Tax Relief And Remediation Can Help You
Taxes are a significant part of our lives and they can be a source of stress and confusion for many individuals and businesses. The Internal Revenue Service (IRS) is the governing body responsible for collecting taxes in the United States and enforcing tax laws. The IRS also provides tax relief and remediation programs for taxpayers who are facing tax-related issues or difficulties. Remember, when you need help with your taxes, contact The Colorado Springs Accountant team at Cash Tracks Financial Colorado Springs, your tax relief specialist.
Tax relief refers to the reduction of the amount of taxes owed to the IRS. This can be achieved through various means, such as tax exemptions, tax credits, and tax deductions. Tax remediation, on the other hand, is the process of resolving tax-related issues and disputes with the IRS. This can include negotiating payment plans, disputing tax assessments, and appealing IRS decisions.
What Are The IRS Tax Relief And Remediation Programs?
There are several IRS tax relief and remediation programs available, and it is important to understand what each of these programs entails and how they can benefit taxpayers. Here are the most frequently used IRS tax relief and remediation:
- Installment Agreements: A payment plan that allows taxpayers to pay their tax debt in monthly installments over time.
- Penalty Abatement: A program that allows taxpayers to request relief from penalties that have been assessed by the IRS for failing to comply with the tax laws.
- Currently Not Collectible: A program that temporarily suspends collection activities on a taxpayer’s tax debt while they are unable to pay.
- Streamlined Filing Compliance Procedures: A program designed to provide relief to taxpayers who have failed to file required tax returns in the past.
- Fresh Start Initiative: A program that provides a range of options for taxpayers to bring their tax accounts back into compliance with the tax laws and resolve their tax liabilities.
- Offer in Compromise: A program that allows taxpayers to settle their tax debt for less than the full amount owed.
- Innocent Spouse Relief: A program that provides relief to individuals who filed a joint tax return with a spouse or former spouse, but who did not know and had no reason to know about an understated tax liability on the return.
IRS Tax Relief Programs In Detail
What Is The IRS Installment Agreement Plan?
The IRS Installment Agreement is a payment plan offered by the Internal Revenue Service (IRS) that allows taxpayers to pay off unpaid tax debt over a period of time. This agreement is available to taxpayers who owe taxes to the IRS but are unable to pay the full amount due. It is an alternative to more drastic measures such as IRS liens and levies.
Under the terms of an IRS Installment Agreement, the taxpayer agrees to make regular payments to the IRS until the full amount of the debt is paid off. The amount and frequency of the payments are determined by the taxpayer’s ability to pay, and the IRS must approve the agreement before it is official. In some cases, taxpayers may also be able to negotiate a reduced amount of debt or an extended period to pay it off.
Typically, taxpayers who enter into an IRS Installment Agreement must pay a setup fee and may be charged interest and penalties on the unpaid tax debt. The IRS may also accept a reduced amount of debt if the taxpayer is unable to make the full payments. Additionally, taxpayers must remain in compliance with all IRS filing requirements while under the installment agreement.
What Is The IRS Penalty Abatement Plan?
The IRS Penalty Abatement Plan is a form of tax relief that allows taxpayers to request relief from certain penalties that have been assessed by the Internal Revenue Service (IRS) for failing to comply with the tax laws. The plan provides an opportunity for taxpayers to have penalties waived or reduced based on circumstances that prevented them from meeting their tax obligations.
To qualify for penalty abatement, taxpayers must demonstrate to the IRS that they had a valid reason for not paying their taxes on time or for not filing a tax return. This could include circumstances such as illness, natural disasters, death of a spouse, or other events beyond their control.
It is important to note that the IRS does not automatically grant penalty abatement. Taxpayers must submit a request for relief and provide documentation to support their claim. The process for requesting penalty abatement can be complex, so it is advisable to consult with a tax professional for assistance.
If a taxpayer’s request for penalty abatement is approved, the IRS will remove or reduce the penalties assessed on the taxpayer’s account. This can result in significant savings for the taxpayer and help to resolve their tax liability. However, even with penalty abatement, the taxpayer is still responsible for paying any taxes owed and any remaining interest on the debt.
What Is The IRS Currently Not Collectible Status?
The Currently Not Collectible status, is a form of tax relief offered by the Internal Revenue Service (IRS) for individuals who are unable to pay their tax debts. When an individual is placed in Not Collectible status, the IRS temporarily suspends collection activities on the individual’s tax debt. This means that the IRS will not seize the individual’s assets, garnish their wages, or take other collection actions while the individual is in this status.
To be eligible for Not Collectible status, an individual must demonstrate to the IRS that they are unable to pay their tax debt due to financial hardship. This can include factors such as a low income, high living expenses, and a lack of assets. The individual must provide financial information to the IRS to support their claim of financial hardship.
It is important to note that being placed in Not Collectible status does not mean that the individual’s tax debt has been forgiven. The debt will still be owed and will accrue interest and penalties over time. However, Not Collectible status provides temporary relief from collection activities and allows the individual to focus on getting their financial situation back on track.
If the individual’s financial situation improves in the future, the IRS may resume collection activities. It is important to work with a tax professional or the IRS to understand the implications of Not Collectible status and to plan for resolving the tax debt in the future.
What Is The IRS Streamlined Filing Compliance Procedures Program?
The IRS Streamlined Filing Compliance Procedures Program is a tax compliance initiative designed to provide relief to taxpayers who have failed to file required tax returns in the past. The program is intended to encourage taxpayers to bring their tax affairs up to date by providing a simplified process for filing past-due returns and paying any taxes owed.
Under the Streamlined Filing Compliance Procedures Program, eligible taxpayers can file past-due returns and pay any taxes owed without facing the normal penalties and interest that would otherwise apply. The program is available to taxpayers who meet certain eligibility requirements, such as having a low level of tax owed and not being under a tax examination or criminal investigation.
To participate in the Streamlined Filing Compliance Procedures Program, taxpayers must file all required returns for the past three years and pay any taxes owed. The program provides a simplified process for filing returns and resolving tax liabilities, making it easier for taxpayers to bring their tax affairs up to date.
It is important to note that even though the Streamlined Filing Compliance Procedures Program provides relief from penalties and interest, it does not provide immunity from prosecution for tax crimes. Taxpayers who have engaged in tax fraud or other illegal activities may still be subject to criminal prosecution.
What Is The IRS Fresh Start Initiative?
The Fresh Start Initiative is a program designed to help taxpayers who are struggling to pay their tax debts. The program provides a range of options for taxpayers to bring their tax accounts back into compliance with the tax laws and resolve their tax liabilities.
The Fresh Start Initiative includes provisions for:
- Expanded installment agreements: Taxpayers can set up a payment plan with the IRS to pay their tax debt over time. The Fresh Start Initiative increases the maximum amount of debt that can be eligible for an installment agreement and makes it easier for taxpayers to qualify for these agreements.
- Penalty relief: The Fresh Start Initiative provides for greater relief from penalties for taxpayers who are unable to pay their tax debts.
- Increased tax lien filing threshold: The IRS Fresh Start Initiative increases the amount of tax debt that must be owed before the IRS will file a Notice of Federal Tax Lien. This helps to reduce the impact of tax liens on taxpayers’ credit scores.
- Streamlined Offer in Compromise: The Fresh Start Initiative simplifies the Offer in Compromise program, making it easier for taxpayers to settle their tax debts for less than the full amount owed.
The Fresh Start Initiative is designed to help taxpayers who are facing financial difficulties and are unable to pay their tax debts. It provides a range of options for resolving tax liabilities and bringing accounts back into compliance with the tax laws.
NOTE: It is important to work with a tax professional, like Cash Tracks Financial Colorado Springs, to understand the options available under the Fresh Start Initiative and to determine the best course of action for resolving a tax debt.
What Is The IRS Offer In Compromise?
The IRS Offers in Compromise is an IRS program that allows taxpayers with tax debt that they are unable to pay in full, or who are facing financial hardship, to settle their debt for less than the amount owed. Depending on their financial situation, taxpayers may be eligible for this program and can submit an application for consideration.
The IRS considers income, expenses, assets, and equity in assets when reviewing an Offers in Compromise application. The taxpayer’s ability to pay the amount due, the amount of the offer, the taxpayer’s current income, and the taxpayer’s expenses are all taken into account. Taxpayers should seek the assistance of a tax professional to ensure that all paperwork is completed accurately and on time.
If approved, the taxpayer will agree to pay a lump sum or make monthly payments to settle the debt. It is important to remember that an Offer in Compromise is not a guarantee of acceptance. The IRS will carefully review each application and make its decision based on the taxpayer’s financial situation.
What Is The IRS Innocent Spouse Relief?
The IRS Innocent Spouse Relief is a tax relief program designed to provide relief to individuals who filed a joint tax return with a spouse or former spouse, but who did not know and had no reason to know about an understated tax liability on the return. In these situations, the individual may be held responsible for the understated tax, interest, and penalties, even though they did not have knowledge of or participated in the understated tax.
The Innocent Spouse Relief program allows eligible individuals to request relief from the responsibility for paying the understated tax, interest, and penalties. To qualify for relief, the individual must have filed a joint tax return and must have no knowledge of the understated tax liability at the time they signed the return.
The IRS considers several factors when determining eligibility for Innocent Spouse Relief, including the individual’s financial situation, their knowledge of the tax laws and the tax liability, and their involvement in the activities that led to the understated tax.
It is important to note that Innocent Spouse Relief is not automatic and must be requested by the individual. The process for requesting relief can be complex, so it is advisable to consult with a tax professional for assistance.
Why Are Tax Relief And Remediation Important?
Tax relief and remediation programs are important for several reasons:
- Resolving tax liabilities: Tax relief and remediation programs provide taxpayers with options for resolving their tax liabilities, bringing their accounts back into compliance with the tax laws, and avoiding additional penalties and interest.
- Preventing financial hardship: Without tax relief and remediation programs, taxpayers may face significant financial hardship, including wage garnishment, bank levies, and seizure of assets. These programs provide options for taxpayers to resolve their tax debts without facing severe financial consequences.
- Providing a second chance: Tax relief and remediation programs provide taxpayers with a second chance to bring their tax affairs up to date and avoid further penalties and interest. This can be especially important for taxpayers who are facing financial difficulties or who have made mistakes in the past.
- Improving taxpayer compliance: By providing taxpayers with options for resolving their tax liabilities, tax relief and remediation programs can improve overall taxpayer compliance and help to ensure that everyone pays their fair share of taxes.
Tax relief and remediation programs are important because they provide assistance to taxpayers who are unable to pay their taxes on time or in full and help to resolve tax liabilities, prevent financial hardship, provide a second chance, and improve taxpayer compliance. These programs play a critical role in the administration of the tax system and help to ensure that the tax laws are fairly and effectively enforced.
Why Is An Enrolled Agent the Best Choice For IRS Tax Relief?
An Enrolled Agent (EA) is a tax professional who is licensed by the Internal Revenue Service (IRS) to represent taxpayers before the IRS. EAs have passed a comprehensive exam and undergone a rigorous background check, ensuring that they have the knowledge and expertise to provide effective tax relief services.
There are several reasons why an Enrolled Agent may be the best choice for IRS tax relief:
- Expertise: EAs have extensive knowledge of the tax laws and the IRS procedures, and they stay up-to-date with changes to the tax code through continuing education. This expertise allows them to effectively represent taxpayers and provide tailored solutions for resolving tax liabilities.
- Representation: EAs have the right to represent taxpayers before the IRS, including negotiating with the IRS, advocating on behalf of taxpayers, and representing taxpayers in audits and appeals. This means that taxpayers can have an EA handle all aspects of their tax situation, freeing up time and resources for them to focus on other aspects of their lives.
- Objectivity: EAs are independent tax professionals who are not affiliated with the IRS. They are not biased towards the IRS or the taxpayer and are committed to providing objective and effective solutions for resolving tax liabilities.
- Cost-effective: Hiring an EA for tax relief services may be more cost-effective than hiring an attorney, as EAs typically charge lower fees for their services.
In conclusion, an Enrolled Agent is a highly qualified and knowledgeable tax professional who can provide effective tax relief services to taxpayers facing IRS tax issues. EAs can negotiate with the IRS, provide representation, and offer tailored solutions for resolving tax liabilities, making them a cost-effective and efficient choice for taxpayers seeking IRS tax relief.
Tax Relief and Remediation From Cash Tracks Financial Colorado Springs
If you need help with an IRS or state tax problem, contact Cash Tracks Financial Colorado Springs at (719) 359-8789 for quick action. We’ve been in business since 1987, that’s over 30 years. We are licensed by the IRS as an Enrolled Agent. We can represent you with the IRS and we have experience, and skills to get you the best possible outcome. Rather than go to a CPA, who might not have the expertise you need, contact us first.
Cash Tracks Financial Colorado Springs
525 N Cascade Ave, #200
Colorado Springs, CO 80903
(719) 359-8789
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