The Income Tax Settlement was established so that a person who has committed a single act of tax evasion or unintentional failure can come clean. There is a provision in the law that permits taxpayers to declare to the Income Tax Settlement Commission income that was not previously reported to the Income Tax Department. Taxpayers can negotiate a reduced payment with the IRS through a settlement programme. Plus, there are settlement choices that emphasise affordable, predictable instalments. Generally, the Income Tax Settlement Commission has a deadline of 18 months from the moment the taxpayer files the application to issue the settlement order. It has broad discretion to absolve income tax assessees of criminal liability and penalties. The Commission’s rulings are final and binding in all respects. Before filing an application with the Commission, the applicant must settle any outstanding taxes and interest due on the increased income revealed. The Commission subsequently makes a decision on whether or not the application is admissible and, in the event of applications that are admitted, proceeds to settle the dispute in a timely manner after providing both parties with an opportunity to be heard.
What are Tax Settlement’s Benefits?
Taxpayers who opt for tax relief by settling their debts have a number of advantages, not the least of which is a reduced debt amount. Any time a taxpayer owes money to the Internal Revenue Service, they risk having those funds and assets garnished. Garnishing a taxpayer’s tax refund is a popular method by which the IRS collects on tax arrears. In the event of a tax refund, the Internal Revenue Service (IRS) will apply the monies toward the taxpayer’s outstanding tax balance. Also, the IRS can start seizing assets via lien and levy proceedings if a taxpayer is in debt for a long time. As part of a levy, the IRS takes possession of your property and applies the proceeds toward your tax liability. A lien filed by the IRS gives the government the right to foreclose on your property and take possession of its contents. Incurring a lien on your credit report can have devastating effects. Taxpayers are able to settle charges and avoid further litigation, and all penalties and prosecution are waived.