Glossary

Filing status defines a taxpayer’s tax rates, standard deduction, and eligibility for credits, based on their marital and household situation.

Financial hardship occurs when a taxpayer cannot pay their tax debt without affecting basic living expenses, qualifying them for relief options like CNC status.

First-Time Abatement (FTA) is a relief program that allows taxpayers to remove IRS penalties if they have a history of compliance.

The First-Time Homebuyer Credit provided tax relief to individuals purchasing their first home, though it is no longer available for homes purchased after 2010.

First-Time Penalty Abatement (FTA) is a program that allows taxpayers to remove certain IRS penalties if they have a clean compliance history.

Form 1099-C is used by creditors to report canceled or forgiven debt to the IRS, which may be considered taxable income.

IRS Form 433-A is a detailed financial disclosure form required when applying for an Installment Agreement or Offer in Compromise.

IRS Form 433-B is used by businesses to disclose financial details when applying for IRS payment plans or offers in compromise.

IRS Form 4868 grants taxpayers an automatic six-month extension to file their federal income tax return.

IRS Form 843 allows taxpayers to request a refund or abatement of penalties and interest due to reasonable cause or IRS error.

Form W-2 is issued by employers to report wages, tips, and taxes withheld for each employee, and it is used to prepare annual tax returns.

The IRS imposes a fraud penalty of 75% of the underpayment for taxpayers who intentionally evade paying taxes through fraudulent actions.

Innocent Spouse Relief protects a spouse from being held liable for taxes owed due to errors or omissions by the other spouse on a joint return.

An Installment Agreement is a payment plan that allows taxpayers to repay their tax debt over time in monthly installments.

An IRS audit is a review of a taxpayer’s financial records and tax return to ensure compliance with tax laws, often triggered by errors or inconsistencies.

The IRS collection process involves multiple stages, including notices, levies, and liens, to recover unpaid taxes from individuals and businesses.

The IRS CP45 Notice notifies taxpayers that their tax refund is delayed due to errors or discrepancies identified on their return. It details the steps needed to resolve the issue

IRS Form 1040 is the standard tax form used by U.S. individuals to file their federal income tax returns, reporting income, deductions, and credits.

IRS Form 1099 is used to report non-wage income, such as interest, dividends, or payments made to independent contractors and freelancers.

IRS Form 12153 is used to request a Collection Due Process (CDP) hearing to appeal IRS enforcement actions, such as liens or levies.