Penalties are the ultimate punishment for people who fail to comply with their tax obligations. 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. Making these tax relief methods publicly known is highly avoided by tax collection authorities. 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. Three of the most effective methods of getting tax relief among the seven are cited below.
Tax relief can be awarded to a person that has been declared bankrupt. Bankruptcy of an individual or an institution may see part or whole of the tax penalty waived. The interpretation of this concept is that the person has no way of paying the debt he owes the tax collection authority. 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. To know when and how to file for relief for bankruptcy, you may need to consult your attorney.
A person undergoing temporary or permanent hardships is another candidate for tax relief. The tax regulation body has a rare opening for people undergoing hardships to be exempted from their tax obligations or pending 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. When such happens, you only need to file for tax relief quoting the hardship as the reason for exemption.
The third way of acquiring tax relief is partial pay agreements with the tax collector. 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. Once accepted, you will then be able to make little agreed minimum payment of your owed taxes. If your tax payment is reducing your ability to meet your basic needs, this is the best method to get a tax relief. The above methods of getting tax relief may be known by a few people but they are all legal and open to any taxpayer.