Tax Reduction Tips, Settle IRS Debt Or Reduce Income Tax Penalty
Tips for Tax Reduction: You're not always stuck paying the full amount owed on your Tax Debt.
With Tax Reduction, you can Settle IRS-Debt for less and even reduce Income Tax Penalty amounts.
Settle IRS Debt for Tax Reduction The best method for Tax Reduction is to Settle your IRS-Debt with an "Offer in Compromise".
While this is certainly the most difficult method for Tax Reduction, you could save a large percentage of the amount owed to the IRS.
The other Tax Reduction method we'll discuss teaches you how to reduce your Income Tax Penalty, but your debt amount will remain the same.
When you Settle IRS-Debt, you could actually owe less than you initially owed before penalties and interest were assessed.
Do you qualify to settle IRS Debt? There's a general rule of thumb you can use to determine if you qualify to reduce tax debt with an Offer in Compromise.
If you truly cannot afford to repay your Tax Debt before the IRS runs out of time to collect on your Tax Debt, you could qualify for the Tax Reduction.
Settle IRS Debt for Tax Reduction, Know the Rules If you or your Tax Professional has decided that you qualify to Settle IRS Debt, the next step is to submit your Offer in Compromise.
Do this by submitting IRS Form 656, Offer in Compromise.
Then adhere to the following rules to complete your application.
Rule 1: You cannot have an open bankruptcy proceeding if you expect to qualify to Settle your Debt and win the Tax Reduction.
Rule 2: Your must include the $150 Application Fee along with Form 656 A.
If you qualify for a Low Income Exemption for the $150 Application Fee, the fee may be waived.
More details on this form can be found in Form 656 B, Offer in Compromise Booklet.
Rule 3: You'll be required to submit an offer payment with your Offer in Compromise application.
This is why the Offer in Compromise is a risky move.
This payment in nonrefundable! You can either pay 20 percent of your offer or the first installment of your offer if you choose to pay your offer in payments.
Reduce your Income Tax Penalty If you have the capacity to pay your Tax Debt in full before the Statute of Limitations on your debt expires, you will not qualify.
However, you could still qualify to reduce your Income Tax Penalty with IRS Penalty Abatement.
This is also known as a "Claim for Refund and Request for Abatement".
Like with an Offer in Compromise, the IRS will not reduce just anyone's Income Tax Penalty.
You have to prove that you couldn't pay your IRS Tax Debt on time because of reasons beyond your control.
These explanations for refusing to pay IRS Debt are known as "Reasonable Cause" by the IRS.
Examples of Reasonable Cause to Reduce or Remove Income Tax Penalty · You were hospitalized and couldn't pay your taxes · You were involved in a natural disaster like a hurricane or a flood · A fire destroyed your home and your tax records · Your tax records were destroyed by a force beyond your control How to Remove Income Tax Penalty: Use IRS Form 843 "Claim for Refund and Request for Abatement".
Unfortunately, it's incredibly difficult to apply to Settle IRS Debt or to reduce your Income Tax Penalty amounts.
The IRS holds you 100% accountable for the entire Tax Debt, and they want it repaid in full.
The IRS is not in the business of "Tax Reduction".
However, the IRS will make Tax Reduction exceptions for those who qualify to Settle IRS Debt or reduce their Income Tax Penalty.
With Tax Reduction, you can Settle IRS-Debt for less and even reduce Income Tax Penalty amounts.
Settle IRS Debt for Tax Reduction The best method for Tax Reduction is to Settle your IRS-Debt with an "Offer in Compromise".
While this is certainly the most difficult method for Tax Reduction, you could save a large percentage of the amount owed to the IRS.
The other Tax Reduction method we'll discuss teaches you how to reduce your Income Tax Penalty, but your debt amount will remain the same.
When you Settle IRS-Debt, you could actually owe less than you initially owed before penalties and interest were assessed.
Do you qualify to settle IRS Debt? There's a general rule of thumb you can use to determine if you qualify to reduce tax debt with an Offer in Compromise.
If you truly cannot afford to repay your Tax Debt before the IRS runs out of time to collect on your Tax Debt, you could qualify for the Tax Reduction.
Settle IRS Debt for Tax Reduction, Know the Rules If you or your Tax Professional has decided that you qualify to Settle IRS Debt, the next step is to submit your Offer in Compromise.
Do this by submitting IRS Form 656, Offer in Compromise.
Then adhere to the following rules to complete your application.
Rule 1: You cannot have an open bankruptcy proceeding if you expect to qualify to Settle your Debt and win the Tax Reduction.
Rule 2: Your must include the $150 Application Fee along with Form 656 A.
If you qualify for a Low Income Exemption for the $150 Application Fee, the fee may be waived.
More details on this form can be found in Form 656 B, Offer in Compromise Booklet.
Rule 3: You'll be required to submit an offer payment with your Offer in Compromise application.
This is why the Offer in Compromise is a risky move.
This payment in nonrefundable! You can either pay 20 percent of your offer or the first installment of your offer if you choose to pay your offer in payments.
Reduce your Income Tax Penalty If you have the capacity to pay your Tax Debt in full before the Statute of Limitations on your debt expires, you will not qualify.
However, you could still qualify to reduce your Income Tax Penalty with IRS Penalty Abatement.
This is also known as a "Claim for Refund and Request for Abatement".
Like with an Offer in Compromise, the IRS will not reduce just anyone's Income Tax Penalty.
You have to prove that you couldn't pay your IRS Tax Debt on time because of reasons beyond your control.
These explanations for refusing to pay IRS Debt are known as "Reasonable Cause" by the IRS.
Examples of Reasonable Cause to Reduce or Remove Income Tax Penalty · You were hospitalized and couldn't pay your taxes · You were involved in a natural disaster like a hurricane or a flood · A fire destroyed your home and your tax records · Your tax records were destroyed by a force beyond your control How to Remove Income Tax Penalty: Use IRS Form 843 "Claim for Refund and Request for Abatement".
Unfortunately, it's incredibly difficult to apply to Settle IRS Debt or to reduce your Income Tax Penalty amounts.
The IRS holds you 100% accountable for the entire Tax Debt, and they want it repaid in full.
The IRS is not in the business of "Tax Reduction".
However, the IRS will make Tax Reduction exceptions for those who qualify to Settle IRS Debt or reduce their Income Tax Penalty.
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