What are the Different Types of Tax Relief Services?

Erin J. Hill

Tax relief services are special programs for individuals or businesses who need help paying their government income taxes. There are various types of tax relief services available, each one being offered to those who meet specific requirements for that type. Services range from partial payment arrangements, installment arrangements, innocent spouse protection, and others.

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Businessman giving a thumbs-up

Most tax relief services are based on income. Those who apply for assistance must prove that they cannot reasonably pay their tax debts without causing severe financial strain. Income requirements and limitations may vary by location, family size, and the amount paid out in bills and other expenses each month.

One type of tax relief service allows taxpayers to make a partial payment instead of the full tax debt amount. Payment is generally made in a lump sum and is negotiated based on the taxpayer’s income. Government officials review the financial information and determine how much the person can realistically pay. The altered amount is generally still due by a set date, and penalties for non-payment still apply.

Other of tax relief services allow the taxpayer to pay his debt in several monthly, weekly, or biweekly installments. The amount owed may or may not be the original full amount. Again, this type of tax relief is usually based on income.

In some cases, tax relief services may involve the complete waiving of the tax debt. This is generally reserved for those who have lost their source of income or who have no way of paying a reasonable amount of the debt. Typically, it only applies to the current tax year and the following tax payment will be required as usual.

Spouses and ex-spouses of delinquent tax payers are also sometimes entitled to certain tax relief services. If it can be proven that the person was in no way responsible for the debt, he or she may be relieved of the full amount. This is common with divorced couples who are audited jointly. Most times, the faulted spouse committed tax fraud or another crime without the innocent party’s knowledge or consent.

To take advantage of tax relief services, it is generally a good idea to hire a tax lawyer. This is someone who is familiar with tax laws and regulations and can find all possible tax relief options. An attorney usually increases a person’s chances of winning tax relief. Prices for a qualified tax attorney vary, but payments are often lower than the debt owed.

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