Types of Tax Relief Services Available

he Offer in Compromise is a program offered by the IRS that allows taxpayers to settle their tax deb[...]

he Offer in Compromise is a program offered by the IRS that allows taxpayers to settle their tax debt for less than the full amount owed. It\’s based on the taxpayer\’s ability to pay, income, expenses, and asset equity. Tax relief services specializing in OIC can assist taxpayers in preparing and submitting a comprehensive application. They will help gather all the necessary financial documentation, calculate the reasonable collection potential (RCP), and present a strong case to the IRS. For instance, an individual with significant medical expenses and limited income may be eligible for an OIC. A professional tax relief service can ensure that the application is filled out accurately and that all relevant factors are considered, increasing the chances of the IRS accepting the offer.​

Installment Agreement​

For taxpayers who cannot pay their tax debt in full but can afford to make regular payments over time, an installment agreement is a viable option. Tax relief services can help taxpayers negotiate and set up an installment agreement with the tax authorities. These agreements typically involve paying the debt in monthly installments over a specified period, which can range from a few months to several years. The service providers will work with the taxpayer to determine an affordable payment amount based on their financial situation and then handle the communication and paperwork with the IRS or state tax agency. This allows taxpayers to avoid more severe collection actions, such as wage garnishment or property liens, while gradually paying off their tax debt.​

Innocent Spouse Relief​

In cases where a married couple files a joint tax return, one spouse may be held liable for the other spouse\’s errors or omissions on the return. Innocent spouse relief provides protection to the spouse who was unaware of the incorrect information and should not be held responsible for the tax debt. Tax relief services can assist in filing for innocent spouse relief by gathering evidence to prove that the spouse had no knowledge of the tax issues, such as showing that they were not involved in the financial decision – making or record – keeping process. They will also guide the spouse through the complex application process and represent them in communications with the tax authorities.​

Penalty Abatement​

Taxpayers often face penalties for various reasons, such as late filing, late payment, or underpayment of taxes. Penalty abatement services focus on helping taxpayers get these penalties waived or reduced. Tax relief professionals will review the taxpayer\’s situation, identify valid reasons for the penalties, and submit a request for penalty abatement to the tax authorities. Valid reasons may include reasonable cause, such as a serious illness or natural disaster that prevented the taxpayer from meeting their tax obligations on time. By leveraging their knowledge of tax laws and regulations, these services can increase the likelihood of a successful penalty abatement request.​

Tax Audit Representation​

When a taxpayer is selected for a tax audit by the IRS or state tax agency, it can be a stressful and intimidating experience. Tax relief services offering audit representation can provide invaluable support. They will represent the taxpayer during the audit process, ensuring that their rights are protected and that they provide the necessary documentation and information in a proper manner. These professionals are familiar with the audit procedures and can anticipate the questions and requirements of the tax authorities. They can also help the taxpayer present a strong case and, if necessary, negotiate with the auditor to reach a favorable outcome, such as reducing the additional tax assessment or avoiding penalties.