The IRS reports that in 2020, Americans owed $114 billion in back taxes. That’s a lot of money, but it’s not one person’s debt. It’s a combination of millions of Americans.
If you’re one of the individuals that owe back taxes, you might consider the IRS debt forgiveness program. Have you heard of it?
Using this program provides a way out of paying your back taxes, but you must qualify for it.
So if you’re considering this program, you’ll need to know a few vital things beforehand. Keep reading to learn the top points to know.
What is the IRS debt forgiveness program? The simple answer is it’s a program the IRS offers to qualifying individuals that forgives their back tax debt.
Of course, the IRS only offers forgiveness to some. First, however, a person must apply for it and meet the criteria.
For example, the IRS limits it to tax debts of $50,000 or less. Additionally, you will only qualify if you earn less than $100,000 if you’re single or $200,000 if married.
The IRS also bases approvals on a person’s tax payment history. To qualify, you must have a history of on-time payments.
If you’ve missed payments in the past, you won’t qualify for this debt forgiveness program. If you meet this requirement, you can apply for the program with the first-time penalty abatement reasoning.
Some people won’t qualify for the first-time penalty abasement reasoning, so they might turn to a reasonable cause basis. Offering a reasonable cause might qualify you for IRS tax debt relief.
For example, did something significant happen in your life which led to your back taxes?
Some people might qualify for this due to an illness, injury, or accident that prevented them from working. Others might fall behind on their taxes due to a divorce, death in the family, or natural disaster.
It would be helpful to talk to a tax professional about the debt forgiveness program if you believe you might qualify. Tax professionals understand how the program works.
They’ll begin by examining your tax payment history. They must know if you have a positive track record.
Next, they’ll help you determine a cause for filing. Then, they’ll complete the paperwork with you for the IRS debt forgiveness program.
The IRS will notify you of their decision after evaluating your application. If approved, they might forgive your total back tax debt.
You shouldn’t ignore the IRS if you owe them money. They can use various techniques to collect this money and will only erase the debt with an approved request.
Therefore, you should consider using the IRS debt forgiveness program if you qualify. You can talk to a tax professional to learn more.
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