7 Facts You Should Know About Student Loan Forgiveness Programs
It may be easier to get rid of your student loans than you ever thought possible!
While total tax debt forgiveness is a bit of a myth, there ARE relief options you can use to reduce or eliminate your liability on unpaid tax debt.
Tax Debt Forgiveness
Here’s a little bit of good news: If you succeed in getting tax debt forgiven with what’s known as an “offer in compromise,” you won’t face a tax bill for the forgiven debt.
But if you owe the IRS they can hold on to your refund, take a chunk of your pay, put a lien on your bank account, seize and sell your property and even revoke your passport.
Uncle Sam also can take 15% of your Social Security check, a benefit that’s off-limits to private creditors. The IRS accepts offers in compromise only if the agency believes it has no better way to collect more of the money it’s owed in a reasonable length of time.
To submit an offer in compromise, you must disclose the value of all your major assets, all your sources of income and all your expenses.
Many people who have trouble paying their tax bills would be better off asking the IRS for an installment plan. Those who owe less than $10,000 get automatic approval. Those who owe $10,000 to $50,000 can use a streamlined process that typically allows them to pay the balance over six years.
To help figure out what options might work for you, fill out our form to set up a consultation or better yet, call us so we help you find the best solution for your situation. We are A- plus rated by the better business bureau and have helped thousands of people with their tax debt issues.
So, don’t struggle any longer, give us a call. When life happens, we’re here for you.
While some illusions are simply harmless distractions, trusting tax forgiveness fantasies can unravel the very fabric of your existence. This might sound dramatic, but if you’ve ever gone head to head with the IRS, you know the hyperbole is apt. “Tax forgiveness,” while ideal in concept, is not a tangible solution for your liability.
Well over half of the individuals and businesses with unpaid tax debt owe less than $5,000There are, however, a number of desirable programs you may qualify for that would forgive all or part of your liability. As you search for a viable solution, it’s easy to be led astray by unscrupulous organizations that promise the world and only cost you precious time and money. Consider these basic, practical resolution options as you avoid stumbling down the wrong path.
Depending on your marital circumstances, this program may be optimal. Innocent Spouse can allow you to negate responsibility for your spouse’s tax misadventures. Simply put, if your significant other incurred a liability from return errors that you had no part in and had no reason to know about, you can avoid sharing the tax bill. The IRS approves cases for qualified applicants who can furnish valid documentation that supports their claim. This proposition is not a forgiveness program, but it does ensure the liability falls on the responsible party.
The closest thing to tax debt forgiveness is the Offer in Compromise or OIC. This is essentially a settlement agreement that you set up with the IRS. An OIC allows you to pay far less than what you actually owe to resolve your tax debt. That’s the good news.
The bad news is that very few people actually qualify for an Offer in Compromise. Typically fewer than 25% of applicants get approved for OICs each year. And there are drawbacks to requesting an OIC if you’re not approved; the statute of limitations on your debt (ten years from the date of assessment) gets suspended while you wait. In other words, if the IRS reviews your request for a year and you’re denied, that year gets added to the life of your debt.
In addition, you’re required to disclose detailed financial information during your request. This can backfire on you if the IRS determines you have the ability to pay your debt by, say, liquidating assets or borrowing against a retirement account.
There is a chance that you can get away without paying the IRS anything at all. If you truly can’t afford to pay back your tax debt, you can request to be considered Currently Not Collectible (CNC). In order to qualify, though, your circumstances must be such that paying any amount toward your liability would present you with financial hardship. CNC status is also temporary, meaning that the IRS will revisit your case to reassess your ability to pay. In theory, though, if your situation remains unchanged for long enough, it’s possible to outlive your tax debt without paying a dime.
Having a tax debt isn’t the end of the world, as the IRS does provide a handful of helpful programs that you may actually qualify for. At the same time, it’s wise to proceed cautiously. For starters, it’s a good idea to consult with a tax resolution company before taking action. This consultation is typically at no cost to you and can provide you with valuable insight on what your best resolution strategy is. After all, there’s nothing wrong with finding a legal solution to your tax problem, provided it’s rooted firmly in reality.
Article last modified on June 27, 2019. Published by Debt.com, LLC