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Is There A One Time Tax Forgiveness?

With taxes owed to the government, for many taxpayers it can be a frustrating experience. Knowing how to get ahead and reduce the overall tax burden can be difficult but there may be some hope in the form of one-time tax forgiveness. Tax forgiveness is not always easy to come by, so if you find yourself in debt with income or other taxes, understanding what possibilities are out there could help alleviate any financial hardship due to high IRS payments.

In this blog post, we will explore different ways that you might be eligible for some type of special tax relief and all the details regarding eligibility requirements. Read more about potential options like IRS Penalty Abatement, Offer In Compromise (OIC), Currently Not-Collectible status, and more!

What Is IRS One-Time Forgiveness?

IRS one-time forgiveness is designed for those who have a specific scenario in which they have failed to file their taxes or pay on time. This program can be seen as a 'second chance' for taxpayers, waiving the penalties usually associated with these types of errors.

It's important to note that this program only applies in certain instances. Individuals wishing to receive IRS one-time forgiveness must demonstrate that they have taken steps to become compliant again and not commit the same violation again in the future.

How To Qualify For One-Time Forgiveness?

To qualify for the IRS one-time penalty relief, taxpayers are expected to have an established record of filing taxes accurately and punctually. Unfortunately, this offer is not valid for those who habitually file late or already owe multiple penalties. Rather, it's meant for individual taxpayers who haven't had any history of errors in their past filings yet still incurred a first-time fine because of an unintentional mistake.

The Internal Revenue Service (IRS) offers one-time forgiveness through penalty abatement to those liable for certain penalties. Individuals must submit their request within a year of being charged, while business taxpayers have until the end of the quarter to seek relief.

The Internal Revenue Service offers a one-time penalty abatement to first-time offenders who are struggling with the following penalties:

Failure-to-pay Penalty:

It is important to remember that the Failure to Pay Penalty is implemented for those who do not pay their taxes on time. This penalty is assessed as 0.5% of the unpaid taxes each month, or part of a month until the tax amount owed has been paid in full. Keep in mind that there is a cap on this penalty amount and it can never exceed 25% of the total unpaid taxes owed.

Failure-to-file Penalty

Filing taxes is a necessary part of every financial portfolio for businesses and individuals. Delinquency can have a dramatic effect on the overall financial solvency of an individual or business.

To prevent mismanagement of tax returns, the IRS has instated a Failure-to-File Penalty which penalties an entity 5% of their unpaid taxes if the return is filed after the due date for each month or part of the month that it is late. While this penalty can add up, it is capped at 25% of the total unpaid taxes due. It is important to submit accurate returns on time to avoid additional charges or worse penalties further down the line.


Other Options For Tax Relief

Don't lose hope if you don't qualify for one-time tax forgiveness. The IRS's Fresh Start program has a variety of options that can help you lower and settle your debt, so investigate what they have to offer!

Taxpayers have four primary options for receiving forgiveness from taxes:

1. Installment Agreement

If you are unable to settle your tax debt, including the fees and interest accruing, then it is generally recommended that the repayment period be set at 72 months.

2.Offer In Compromise (OIC)

If you can demonstrate to the IRS that paying your full tax debt would cause financial hardship, an offer in compromise may be a viable option for you. This allows you to pay just a fraction of what's actually owed!

3. Currently Not-collectible Status

Demonstrating to the IRS that you are unable to pay your debt, either through an installment agreement or in full, will give you a window of up to two years before they take any collection activities regarding your tax liability.

4. Penalty Abatement

If you find yourself in an atypical tax predicament that has impaired your ability to pay, there may be some flexibility when it comes to taxes.

What Are The Ways To Seek One-time Forgiveness?

Seeking one-time forgiveness is achievable in three distinct ways:

1. First-time Penalty Abatement:

This program has been designed to help those who have unintentionally overlooked their obligation of filing or paying taxes. As long as it is evident that the taxpayer will be compliant going forward and won't repeat this same mistake, they are eligible for a waiver of any assessed penalties against them- one time only.

2. Reasonable Cause:

This program is designed to help those whose failure to comply with their tax obligations was due to circumstances that are beyond the control of the taxpayer. Examples include a death in the family, a natural disaster, or any other similar situation.

3. Statutory Exception:

If you received erroneous written advice from the IRS, you may request a statutory exception. This means that you may be exempt from any penalty or interest that was charged due to incorrect advice. 

Ask For Professional Help

Navigating the complexities of taxes is no small feat. There are a variety of government organizations, such as the IRS and state tax agencies, that have specific rules and regulations that must be followed in order to receive tax forgiveness.

If you require tax relief, it is prudent to seek assistance from a knowledgeable tax professional who can help guide you through the procedure and guarantee that all documents are completed accurately.

This can save you time, money, and the headache of dealing with government bureaucracy. Working with a professional can also offer peace of mind that your taxes are taken care of correctly and that you are receiving all the tax relief that you deserve. 

The Bottom Line:

Tax filing can be a complicated and overwhelming process, yet there are certain programs available to provide relief for those who have accumulated debt. One of the most popular is Tax Forgiveness; if you're struggling with your taxes, don't hesitate to seek guidance from professionals. With their expertise and support, you will find comfort in knowing that your finances are in order once more. 

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