Tax relief is any tax deduction allowed to taxpayers by federal or state tax authorities for certain categories of expenses. An example is allowing the deduction of interest paid on educational loans from the income tax payable. Tax relief also takes the form of full or partial tax breaks for low- and moderate-income families. In some cases, tax relief includes releasing citizens from taxes immediately, particularly during natural disasters and similar contingencies. An example is the tax breaks granted to families after the devastation caused by hurricanes in the south in 2005.

Tax relief helps everyone, especially low-income families. It is normally provided as deductions from any of various taxes such as income tax, state tax, property tax, etc. In 1992, a tax relief program introduced by the Internal Revenue Service was specifically aimed at helping individuals and businesses pay off back taxes. This helped people who were having financial difficulties to pay at least a part of the taxes they owed. This process, which allows taxpayers to settle back taxes they owe for less than the full amount, is known as an offer in compromise.

Typically, tax relief works through a process in which tax authorities review a taxpayer’s ability to pay taxes based on information about the person’s income and assets. A tax relief is granted if it is determined that the recovery of a certain tax is unreasonable because the values ​​of the assets have decreased significantly. However, the tax authorities grant a tax relief only if the taxpayer’s request for relief is based on a valid reason as defined by law. Tax relief is also granted in special circumstances. In the case of inheritance and gift taxes, a relief can be granted if it is verified that the value of the goods received has been significantly reduced.