Tax Relief

Kinds of Tax Aid Each Entrepreneur Must Know | Megan’s findings

Tax breaks for SMEs are more in demand than ever due to the pandemic that literally overran the economy for around a year. The IRS offers several programs for businesses struggling to pay their taxes on time. They have minimized several bureaucratic procedures to make the process quick and easy for the SMEs and to prevent seizures due to unpaid taxes.

IRS Installment Agreement

IRS installment arrangements like the direct debit installment arrangement come in handy for many small businesses. The automatic payment deductions eliminate late fees and the installment payment process enables business owners to pay in simple EMIs.

When this agreement is in place, there will be no enforced tax collection or measures such as levy or tax lien. A competent tax attorney will help you prepare such agreement requests that highlight your business issues.

Small business owners struggling with low profits can apply for installment payments with the help of experienced tax attorneys mediated by Taxfortress.com. They will help you use the most appropriate tax break programs to help you ease the tensions of the IRS.

The installment installment agreement

The installment installment agreement enables a person to repay taxes in small payments with extremely small monthly EMIs. The IRS requires various disclosures and is closely monitoring the business owner’s financial condition to determine if they are eligible for the program.

The SME owner can pay a certain amount of tax and pay the rest in monthly installments over the next ten years. It’s very beneficial to them as they can use the extra money to get back on their feet and improve the business. You can reevaluate the contract and pay the tax in full if the business is doing well within a few years of signing. Offer in compromise

The offer in Compromise or OIC enables business owners to negotiate and settle the amount of tax payable. The business owners do not have to pay the entire amount to the IRS. You can list the reasons why you cannot pay the tax in full due to operational loss, natural hazards, depreciation, etc.

The IRS gives them the option to pay less than they owe the state. There are three categories in the OIC: a) doubts about liability, b) doubts about collectibility, and c) effective tax administration. The collectibility doubt is the most common form of OIC applicable to SMEs.

Currently not collectable

The Current Not Collectible or CNC requires SMEs to demonstrate that they cannot even pay the monthly rate for taxes. SMBs struggling to maintain their high credit business often choose this option. It damages their creditworthiness and decreases their ability to gain more credit from banks and other small business grants.

CNC also grants temporary exemptions from paying taxes to the IRS for a period of time. The IRS conducts regular reviews of the company’s financial position and decides whether to extend the CNC period or change the program to a partial payment over time.

Tax exemption

The IRS tax reduction has no impact on creditworthiness and encourages SMEs to regularly pay their taxes on time. Penalty waivers can be invoked when a legal exception arises, in the event of an administrative waiver, an IRS mistake, or simply a reasonable cause such as a loss of business.

IRS does not impose significant fines on them if they declare and pay their taxes on a regular basis. They even eliminate various penalties if the tax is paid in a timely and voluntary manner by the SMEs.

The SMBs may be eligible for a refund for the standard form of IRS penalties, such as late tax filing fees or non-payment fees, if they provide a reasonable reason for the delay.

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