When people fail to meet their tax obligations, they are penalized. Penalties are the biggest fear of any taxpayer anywhere in the face of the earth. Considering that you are unable to fulfill your tax obligations due to financial hardships, being penalized is adding an insult to an already wounded person. For such people, luckily, there is a way of evading penalties. Tax relief is the solution that comes to the aid of these people.
When your tax payments are delayed, the only way to evade the penalties is by tax relief. The different methods of tax relief are kept away from the public eyes by the tax firms as much as possible. The accessibility of the information regarding tax reliefs is however not entirely impossible. Bankruptcy, hardships, making partial payments, streamline pay agreements, penalty abatement and the amendment of own tax obligation are the seven known methods of getting tax relief. Below are three of the most effective tax relief methods among the seven.
Tax relief can be awarded to a person that has been declared bankrupt. Part or the whole of a person’s tax debt may be lifted if a person or institution is declared bankrupt. The interpretation of this concept is that the person has no way of paying the debt he owes the tax collection authority. You, however, need to be careful before filing for bankruptcy since sometimes application for a tax relief when in the middle of a bankruptcy application may deny you the relief you are seeking. Seek sufficient information from your attorney in this process.
The other way of getting tax relief is when you are undergoing temporary or permanent hardships. For these people, tax collection bodies give an opening to exempt them from their tax obligations and penalties. Some hardships considered by tax collection authorities may include being hit by disasters like earthquakes and tsunamis; having a permanent medical condition that affects your income generation among many others. Being in such a situation, one should file for a tax relief in order to be exempted from the pending penalties and other tax obligations.
The third way of acquiring tax relief is partial pay agreements with the tax collector. As a taxpayer, you may enter into an agreement with the tax collection firm to allow you to make your payments in agreed monthly remittances and not necessarily in full. Once accepted, you will then be able to make little agreed minimum payment of your owed taxes. This solution can work best if the chunk being taken by tax is crippling your other activities and needs. The above methods of getting tax relief may be known by a few people but they are all legal and open to any taxpayer.