Know What Ways You Can Use to Get a Tax Relief
Penalties are the ultimate punishment for people who fail to comply with their tax obligations. The biggest fear any taxpayer has is the fear of being penalized. It is an additional burden to be penalized considering that one fails to pay his taxes due to financial problems. For such people, luckily, there is a way of evading penalties. Tax relief is the solution that comes to the aid of these people.
To keep off from being penalized when you have delayed in paying your taxes, you need to a tax relief. Making these tax relief methods publicly known is highly avoided by tax collection authorities. Though unknown to many people, tax relief methods are very accessible. 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. Three of the most effective methods of getting tax relief among the seven are cited below.
Being declared bankrupt is the first and an almost guaranteed way of getting tax relief. Bankruptcy of an individual or an institution may see part or whole of the tax penalty waived. Being bankrupt, one is perceived to lack the ability to pay the debt he owes the tax collector. Caution should, however, be taken because tax relief may be denied to a person applying to get tax relief when in the process of filing for bankruptcy. A clear guidance on applying for this type of relief can be given by your attorney.
The other way of getting tax relief is when you are undergoing temporary or permanent hardships. The tax regulation body has a rare opening for people undergoing hardships to be exempted from their tax obligations or pending penalties. Circumstances that may qualify as hardships may include being hit by disasters like earthquakes and tsunamis, having a permanent medical condition that affects your income generation among many more in that line. When such happens, you only need to file for tax relief quoting the hardship as the reason for exemption.
Tax relief is also done by the signing of a partial payment agreement with the tax firm. Through the agreement, a taxpayer is allowed to make monthly payment of the taxes he has in debt rather than having to make a payment of the tax arrears in full. The taxes you need to pay can then be paid in monthly installments. This solution can work best if the chunk being taken by tax is crippling your other activities and needs. Getting tax relief through these methods could be unknown but the methods are legitimate.