Last year signed into law by President Obama on December 17, 2010 was the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act).
120 Day Extension
As an interest to aid to U.S. Taxpayers who have been contacted by the U.S. Internal Revenue Service, the Federal Government is granting an automatic additional 120 day extension to respond to the IRS inquiries by way of simple written request. This added four month extension to respond without additional tax penalty or accumulating interest will continued to be allowed by way of this Act only through the year 2012.
This added time allows the taxpayer needed reasonable time to retain a Tax Professional: Attorney, Certified Public Accountant (CPA), or an IRS Enrolled Agent (EA) to handle their outstanding income tax issue and comply with the IRS filing requests or payment requests to date. With this Professional Tax Relief engagement the taxpayer can readily have the IRS stop any Wage Garnishments, Account Levies, or Property Liens that may have been locked in place by the U.S. Department of Treasury right away in requesting this 120 extension. Then within this time the Taxpayer can be brought in Compliance with the IRS by simply making outstanding filings without payment at this time, or arrange a payment plan addressing payments due with Tax Penalty Abatement, or seek an Offer in Compromise Settlement based upon ability to pay.
This professional Tax Relief as explained can provide instant monetary relief from irs relief, Wage Garnishment, Levies, & Liens and also relieve one from further current collection efforts of the U.S. Department of Treasury- IRS.
Some other aspects of the 2010 Tax Relief Act that addresses the common taxpayer are:
An Individuals’ taxable income will continue to be subject to six tax rates at 10%, 15%, 25%, 28%, 33% and 35% through 2012 with the expanded 15% bracket for married joint filers that will provide marriage penalty relief is also extended through 2012. Estates’ taxable income will continue to be subject to five tax rates of 15%, 25%, 28%, 33%, and 35% through 2012.
Qualified Dividends Rates & Capital Gains Rates
In addition, the 2010 Tax Relief Act extends the 0 and 15% rates on adjusted net capital gains through 2012. Also extended is the treatment of qualified dividend income as adjusted net capital gain, taxable at the same 0 and 15% maximum rates through 2012. The Act extends the 0 and 15% Alternative Minimum Tax rates on adjusted net capital gains through 2012 as well in less common circumstances.
Employee Payroll Tax Reduction
The employee portion of Social Security taxes has also been reduced from 6.2 to 4.2 percent for 2011 wages only at this time. The employer portion will remain at 6.2 percent. A similar rate reduction applies to the railroad retirement tax as well.
Therefore, if you are someone who is contemplating resolving their debt with the IRS, now the time to take advantage of this added 120 days given by the IRS to resolve your back income tax issues before the end of 2012.