Tax Relief

Personal tax relief for people in debt

If you are facing a situation where you are unable to pay your income tax, you may need to look into a tax relief program to prevent the IRS from garnishing your wages, seizing your property or otherwise penalizing you. Personal tax relief is available from a variety of sources, and may include emergency loans, negotiated settlements and other tax debt relief options that can protect your personal property and credit rating.

IRS Tax Relief: How it Works

Tax relief is different than a tax credit; a tax credit is a claimable item that you can use to reduce the overall amount of taxable income you have to claim. For example, if you made $50,000 last year and made $1,000 worth of home renovations that qualified for a tax credit under the government's Energy Star program, then your overall taxable income would immediately be reduced to $49,000. Tax relief means that if you owe the IRS $25,000 in taxes and are unable to pay them, you negotiate with them to reach a settlement or turn to a third party for help.

Some of the tax debt relief options that may help you include:

  • Professional assistance with filing back tax returns
  • Tax settlements
  • Resolution of wage garnishment
  • The removal of tax liens and tax levies
  • Payment plans for outstanding taxes
  • Defense and support for audits
  • Assistance with the IRS collection process

In some cases, you may be able to get secured loans to raise the money to pay off your taxes. These loans will come with interest rates and terms that are advantageous, compared to what the IRS is charging you for unpaid taxes. If you have protected assets, this is an option you may want to consider as it can help you become debt-free faster.

The Tax Relief Act, a temporary piece of legislation that was passed in 2010, may also help you reduce the sting of your tax burden. Essentially, it continues to offer tax breaks that were introduced by the George W. Bush administration which were intended to expire when he left office, and aims to provide real tax relief to Americans struggling to keep their heads above water in the fallout of the 2008-2009 global financial crisis.