What is forgiveness of tax debt?

Tax debt forgiveness is a type of financial activity provided by some tax agencies to taxpayers under specified conditions. This type of support with tax debt in principle includes an evaluation of the circumstances of the taxpayer, which currently owes an outstanding balance for tax periods and determining whether there are reasons for rejecting or part of the tax obligation. Many national and state and provincial tax agencies have established policies and procedures that governed, as administered for the forgiveness of tax debt and what circumstances must prevail in order for the taxpayer to be provided with this type of assistance.

Usually the taxpayer is initiated by the process of forgiveness of the tax debt. Using forms and procedures established by the tax agency, the taxpayer shall submit all relevant information regarding the application for rejection or at least reduce the current tax debt. Authorized staff in the agency evaluate the application form and other support documents, verify the information providedAnd find out if there is a reason why to further consider the application. If insufficient data is provided or if the applicant does not meet the basic criteria required by the agency to be considered as a forgiveness of the tax debt, the application will be rejected. If the agent assigned to review the application believed that there were reasons for considering the application for forgiveness, contact with the taxpayer is initiated and the investigation continues.

Only after the tax agency is fully convinced that the taxpayer meets the criteria for forgiveness of the tax debt, this type of debt release will pass. When the entire debt is rejected, the taxpayer is informed and the debt for a specific tax period is considered to be settled in full. If the Agency determined that only part of the outstanding debt should be rejected, the agent will often cooperate with the taxpayer to secure the reduced amount.

existsA number of situations in which the tax agency may decide to break the forgiveness of tax debt in some way. Situations that make it impossible to earn revenue or sell assets to the taxpayer to settle debt, such as prolonged periods of poor health, imprisonment in a certain type of mental institution or other mitigating circumstances recognized by the tax agency may be a reason for qualifying for tax debt. Given that the tax laws and regulations related to this type of debt forgiveness will change from one jurisdiction to another, taxpayers who think they can qualify for this type of assistance should turn to a tax agency or agencies currently owed.