What are Back Taxes?
Back taxes are taxes that were not paid to the Internal Revenue Service in the time frame in which they were due. Most often, they were due to the IRS in a previous year. You can owe back taxes on a federal, state or even at a local level.
What happens if you owe back taxes?
Ignoring the problem is generally NOT a strategy that works, so we have outlined the process below for you and provided some potential solutions that could help.
1. Within 30 days of a missed payment, you will get a notice from the IRS requesting payment.
2. The IRS will follow-up with you on the order of once each month by mail until about six months have passed. Then the IRS will start calling you directly.
3. Penalties: Generally speaking, you are looking at some serious penalties if you have back taxes. The total late filing penalty is usually around 5% of the taxes you owe for each month (up to 5 months). If you paid part but not all of what is due to the IRS, you will receive a penalty for being late as well as interest on the current tax bill.
4. Liens: If you fail to pay your tax bill for years, you could face a tax lien — which is a legal claim to your property, even property obtained after the tax lien is put in place. Liens are very serious issues for taxpayers, as they significantly impact your credit score. Liens require significant time, effort and money to resolve.
What can you do to resolve these back taxes?
While the penalties for back taxes sound overwhelming and scary, it is important to understand that there are many options for those who owe the IRS back taxes. Hiring a tax firm to help you sort out your options is often a very wise move. Success Tax Relief has been communicating directly with the IRS on behalf of our clients for more than 30 years. We have experience negotiating solutions for our clients who are faced with back taxes. The IRS will often allow taxpayers to pay their back taxes in installments, which is very similar to credit card payments.
We can also explore additional options including requesting additional time to pay as well as offers in compromise, which allows a taxpayer to settle their debt with the IRS for less than the amount owed, should he/she be able to show that they are legitimately unable to pay the full amount. Success Tax Relief has experience with all types of negotiations with the IRS and has successfully managed this difficult problem for thousands of customers over the years. If you owe the IRS back taxes, give us a call today at 1-877-825-1179 and we can get to work for you. All you have to do is take the first step and contact our tax relief team. You do not have to do this alone – let us help solve this problem for you!