Tax Relief - Looking At Alternate Solutions

Finance Articles | August 28, 2009

Sometimes we simply cannot avoid the consequences of ignorance or procrastination when it comes to our taxes. People who find themselves in this predicament may not get the full benefits of tax relief. However, there are ways of managing the situation so that it is not overwhelming. All about that.

Sometimes we simply cannot avoid the consequences of ignorance or procrastination when it comes to our taxes. Many people who find themselves in this predicament may not get the full benefits of tax relief to which they would otherwise be entitled. However, there are ways of managing the situation so that it is not overwhelming.

Discharge - File for bankruptcy

This is normally the last resort that would give relief to a taxpayer who is unable to reduce liability through any other way. Tax relief is granted when certain kinds of income taxes are dischargeable in bankruptcy.

Payment Plans/Installment Agreements

One may pay all the debt owed in full or structure a log-term payment plan. If one can make an immediate payment, the accumulation of interest and fees are avoided, as well as avoiding any future enforcement or harassment from the Internal Revenue Service.

Adjust the debt - Abatement

This is a tax relief method in which a tax, tax penalty or interest on tax is reduced or changed. Usually it refers to removing an assessed tax liability or if it is adjustment, the tax liability that was assessed is changed.

Expiration - Allow Statute of Limitations to expire

The Internal Revenue Service has a limited number of years to collect delinquent taxes. The date on which the tax is assessed is the date that begins the statutory period, the period during which the debt is to be collected. If the last day of collection in this period passes, there is a possibility that a person in debt is free and clear of the IRS obligation. This statute can be changed or extended in many circumstances, so one needs to consult with a tax professional to discuss the possibilities.

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