Tax Relief Glossary

Tax Relief: Reduction or elimination of taxes owed through various programs and strategies.

Tax Reduction: Decrease in the amount of taxes owed, typically achieved through deductions and credits.

Audit Representation: Professional assistance provided to represent a taxpayer during an IRS or state income tax audit.

Settlement Amount: The negotiated, reduced amount agreed upon by the taxpayer and the IRS to settle the taxpayer’s outstanding debt.

Financial Hardship: A condition where a taxpayer is unable to meet basic living expenses, leading to temporary relief from tax collection efforts by the IRS.

Payment Plan: A structured arrangement allowing taxpayers to pay their tax debt in manageable monthly installments over a specified period.

Employment Tax: Taxes that employers are legally obligated to withhold or pay on behalf of their employees, including income tax, Social Security, and Medicare taxes.

Withholding Tax: A tax required to be withheld by buyers on the sale of U.S. real property interests by a foreign person.

Trust Fund Penalty: A penalty assessed against business owners or officers for failing to properly remit payroll taxes withheld from employees’ wages to the government.

Property Lien: A legal claim or encumbrance against a taxpayer’s property, imposed to secure payment of taxes owed.

Asset Seizure: The legal process by which the IRS or other tax authority takes possession of a taxpayer’s property to satisfy unpaid tax debts.

Income Withholding: A legal procedure where a portion of an employee’s earnings is withheld by the employer and directly paid to the debt creditor.

Reduced Payment Plan: An agreement allowing taxpayers to make monthly payments that are less than the full amount of tax owed.

Tax Evasion Defense: Legal representation and defense services provided for individuals or entities facing criminal charges by the IRS for tax-related offenses.

Offer in Compromise: A program allowing taxpayers to settle their tax debt for less than the full amount owed.

Back Taxes: Taxes that are overdue and remain unpaid.

Tax Compliance: Adherence to tax laws and regulations, including timely filing of returns and payment of taxes.

Tax Fraud: Intentional wrongdoing with the specific purpose of evading a tax owed.

Tax Resolution: Services aimed at resolving tax issues such as unpaid taxes, audits, and tax debts.

Levy: A legal seizure of property or assets to satisfy a tax debt.

IRS (Internal Revenue Service): The federal agency responsible for administering and enforcing the internal revenue laws.

Installment Agreement: A payment plan arranged between a taxpayer and a tax authority to pay back taxes in installments over time.

Penalty Abatement: Reduction or removal of penalties charged on unpaid tax debts.

Tax Advocate: A professional who assists taxpayers in resolving issues with tax authorities.

Tax Return: A form filed with a tax authority that reports income, expenses, and other relevant financial information.

Wage Garnishment: A court order directing an employer to withhold a certain amount from an employee’s wages to repay a debt.

Filing Status: Classification of a taxpayer’s marital and family situation, which determines the rate at which income is taxed.

Compromise Agreement: A settlement between a taxpayer and a tax authority where the taxpayer agrees to pay a lesser amount than what is owed.

Interest Abatement: Reduction or removal of interest charged on unpaid tax debts.

Garnishment: A legal process where money is automatically deducted from a person’s wages or bank account to pay a debt.

Currently Not Collectible: A status granted by the IRS when a taxpayer is unable to pay their tax debt due to financial hardship.

Payroll Tax: Taxes imposed on employers or employees, usually calculated as a percentage of the salaries that employers pay their staff.

FIRPTA (Foreign Investment in Real Property Tax Act): U.S. tax law requiring a buyer to withhold income tax on the sale, exchange, or other disposition of U.S. real property interests by a foreign person.

Trust Fund Recovery Penalty Resolution: A service aimed at resolving penalties assessed against business owners or officers for failing to properly pay payroll taxes.

Tax Liens: A legal claim against a taxpayer’s property as security for the payment of taxes.

Partial Payment Installment Agreement: An agreement with the IRS allowing taxpayers to make monthly payments on their tax debt that are less than the full amount owed.

IRS Criminal Defense: Legal representation and defense services provided to individuals or entities facing criminal charges by the IRS for tax-related offenses.

Tax Evasion: The illegal act of not paying taxes owed by providing false information or hiding income.

Taxable Income: The amount of income used to calculate an individual’s or a company’s income tax due.

Tax Deduction: An expense that can be subtracted from a taxpayer’s gross income to reduce the amount of income that is subject to tax.

Tax Credit: A dollar-for-dollar reduction in the tax owed, providing a savings to a taxpayer.

Tax Exemption: A provision in the law that reduces or eliminates a taxpayer’s obligation to pay tax.

Tax Bracket: A range of incomes taxed at a given rate.

Tax Withholding: The amount of an employee’s pay withheld by the employer and sent directly to the government as partial payment of income tax.

Tax Liability: The total amount of tax debt owed by an individual, corporation, or other entity to a taxing authority.

Tax Assessment: The determination of the tax liability of a taxpayer by the appropriate taxing authority.

Tax Year: The 12-month period for which tax amounts are calculated.

Taxpayer Identification Number (TIN): A unique number assigned to individuals and businesses for tax purposes.