Loan for Tax Debts
March 1, 2019
Almost no one likes to take credit for tax debts. It is not pleasant to borrow money and pass it on to the tax office. Nevertheless, applying for a debt loan from the Treasury may be required. This applies especially to self-employed and freelancers, where the tax auditor does not recognize part of the business expenses. Also affected are couples with the tax code combination III / V. Banks grant consumer credit at leisure. The applicant does not therefore have to state that he needs the credit to settle his tax debts.
Does the tax office not grant a deferral?
The tax office grants a tax deferral only if the taxpayer proves the futile effort for an external credit for the tax debts. Otherwise, the taxpayers will not agree more than a partial payment over three to a maximum of six months. A precondition for any concession from the tax office is that the taxpayer did not consciously conceal income. If the credit for the tax debt is required for the payment of inheritance tax after the heir of a property, this is to be lent.
Find the appropriate loan for the tax payment
Freelancers and the self-employed need a loan for the repayment of taxes much more frequently than employees, where the employer deducts the resulting taxes automatically. When lending, they pay attention to which banks they accept as credit customers for private purposes, which includes the additional payment of income tax. This is not the case with all financial institutions, which reduces the choice of potential creditors to employees. It is almost always clear from the terms and conditions of a bank whether it lends to non-employees. This is mostly the case for larger banks, while smaller banks often limit lending to employees.The most important criterion for selecting a credit for tax debts is the effective annual interest rate. A tax clause which allows for partially flexible loan repayment is also advantageous for the taxpayer. Ideally, this includes both the right to extraordinary repayments without prepayment interest being calculated and the possibility of sporadically suspending them at a rate or extending their term should the financial situation deteriorate. The latter is possible out of goodwill even without a corresponding regulation in the credit agreement. Experience reports on the benevolent behavior of financial institutions with regard to customer wishes regarding a change in the repayment agreement are meaningful in the past. However, they offer no guarantee that the benign behavior of the bank will not change in the future. For this reason, contractual commitments are more reliable than the previous voluntary commitment of a credit provider.
The borrowing for the tax debts with weak credit rating
Before approving a deferral, the tax offices require that the taxpayer has made intensive efforts to obtain a credit for his tax debts. The mere reference to a negative Schufa entry is not enough. Indeed, there is a realistic chance of successfully soliciting a bank loan, at least for a single soft negative feature in the credit report. Some financial institutions expressly point out that in such cases they do not generally refuse to lend, but examine the individual case. The relevant banks can be identified by the explanations for lending. Another way to apply for the credit required for tax back-up is through lending platforms between individuals.For this reason, applicants for a private loan state the planned use of funds, while traditional commercial banks ask them only for special loans on preferential terms. Private lenders generally anticipate that filing for a loan for tax debts will help the claimant to do so as well as lending. If even private borrowing fails, the tax office can not help agreeing to a moratorium on the futility of applying for an external loan. Basically, this thought is correct. Should a taxpayer, however, due to a deliberately incorrect tax return, have to pay a high additional payment, the tax office does not oppose him. It is indispensable in this case to indicate, in the grounds of the credit request, for the failure to do so, so that the potential private lenders know that the requester is forced to rely on credit for his tax debts. The corresponding claim in the loan application usually results in the platform members signing up as lenders recognizing the urgency of lending and drawing the required amount.