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What is Personal Tax Relief?

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  • Written By: Erin J. Hill
  • Edited By: Bronwyn Harris
  • Last Modified Date: 11 September 2016
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Personal tax relief involves the alleviation of tax debt that is offered to certain individuals who are having problems paying their government taxes. There are four main kinds of personal tax relief, most of them being based primarily on income. The amount of money a person can likely contribute will help determine how much, if any, tax money will need to be paid.

The first type of personal tax relief allows the individual to pay a portion of his taxes in one lump sum. This amount is determined by the income of the person in conjunction with the amount he pays out each month in bills and other living expenses. The amount paid is generally much lower than the original sum, thus taking much of the financial strain off the individual.

Another kind of personal tax relief allows the person to make weekly, biweekly, or monthly payments to the government until the tax debt is cleared. The total amount to be paid may be equal to or less than the original amount, but instead of paying in a lump sum, it is broken down in several smaller parts. Paying in installments is often much easier for lower or mid-level income individuals to handle than a large lump sum.

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Some individuals, after a thorough investigation of their finances, are eligible for tax relief that exempts them from paying any taxes for that tax year. This is generally offered to those with families who have lost their source of income due to no fault of their own. Exemption is only guaranteed for one tax year, and the next year’s taxes will be due as usual.

Finally, there is a type of personal tax relief that affects spouses or ex-spouses of individuals who are delinquent on their taxes or who have been audited due to misinformation on their tax returns. This relief is known as innocent spouse relief, and it says that the non-guilty party is not responsible for any delinquent payments even if the taxes were filed jointly. In many cases, this option is available to people who are divorced or divorcing.

To be eligible for any kind of personal tax relief, one must contact the proper government agencies and make an appointment to speak with an officer. At that meeting, the individual must explain his situation and often must fill out an application to receive any of the relief options. Once that is done, the government agency will look over all financial records to determine if the person is eligible for relief.

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John57
Post 4

I know a couple who really hit hard times. The saying, 'when it rains it pours' certainly held true for them. They both had major health problems and were not able to work.

In addition to that, their home was destroyed from a flood. They were able to receive some personal tax relief the year their home was destroyed.

Having some kind of financial break was beneficial for them. It has been a long road, but they are slowly working their way out of it. Even though the personal tax relief was for one year, it helped relieve them of a big burden.

Many times it can be frustrating going through all the red tape, but if it comes out to your advantage in the end, it is worth it.

Mykol
Post 3

My parents were involved in a business deal with 2 other couples. This ended up going bad, and it was many years before everything was finally straightened out.

All parties were equally responsible, but they were able to receive some personal tax relief. I don't know all the details, but I do know the amount they ended up paying back was not as much as the original amount owed.

This business deal took a huge financial toll on them, and they were very thankful they did not have to pay back the entire amount. I don't know the fed tax relief rules and procedures, but am grateful there are situations where they give some kind of personal tax relief.

LisaLou
Post 2

It can be really scary when you find out you owe back taxes to the IRS. We were audited one year, and even though we had paid for someone to file our taxes, we ended up owing the government more money.

Thankfully we we able to split these payments up into monthly payments. Several years had gone by and there was no way we could have made a lump sum payment. The amount of money we paid in fees and interest was almost as much as the original amount owed.

We still had to pay the full amount, but at least we were able to split up the payments. Since then we have been a lot more cautious when we file our taxes. This was an innocent mistake on our part, but it still ended up costing us a lot of money.

bagley79
Post 1

I was granted personal tax relief in the form of innocent spouse relief after I was divorced. This ended up being a lengthy process, but it was well worth it in the end.

I was able to prove that I was not responsible for the taxes that were due on our previous joint tax return. At first I was really nervous about making this appointment and didn't know if it would end up favorable for me or not.

I ended up working with a IRS tax relief attorney who was very helpful and thorough. It is something I wouldn't want to go through again, but the tax relief made a huge difference in my financial situation.

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