Back Taxes: What Are They & How to Resolve Them

Find Tips For You Back Taxes Issue

Back Taxes Tips
Back taxes are taxes owed to the IRS from the current tax year or previous tax years. Back taxes include federal, state, and local income taxes, business payroll taxes, tax liability underpayment, and tax debt from unfiled returns. The longer a taxpayer owes back taxes, the more penalties and interest are added to the overall tax debt.

Statute of Limitations

Taxpayers burdened with back taxes have a statute of limitations that prevents the IRS from collecting the tax debt after 10 years from the date of assessment. However, there are stipulations to this rule. For example, if the taxpayer files for bankruptcy protection, the statute of limitations is paused until after the bankruptcy is lifted (usually seven years). The IRS is not to commence collections while a taxpayer is in bankruptcy, but it is up to the taxpayer to inform the IRS of the Chapter in which they filed.

If the IRS suspects a taxpayer has purposefully failed to file their taxes, then an investigation will take place. This is the last place any taxpayer wants to be. If the IRS deems the taxpayer evaded paying federal taxes, criminal charges will be brought up, resulting in hefty fines and in some cases jail time!

Back Taxes Tips

In order for taxpayers to resolve their back taxes, they will need to follow these tips for the different kinds of back taxes.

  1. If you have unfiled years of tax returns, file any and all back taxes that have not been filed. For returns that have mistakes or where the IRS files for you, file amended returns. This may reduce your tax debt or eliminate it altogether.
  2. If you are a small-business owner who has payroll back taxes, you should find a tax professional immediately, as the IRS takes this particular kind of back taxes more seriously than individual income tax debt.
  3. If you have back taxes because of an early withdrawal from your 401k, you should speak to a certified tax professional so that you do not owe this tax debt for future tax years.
  4. If your back taxes are a result of fraud that wasn't of your doing (i.e. spouse, identity theft, tax preparer fraud), you may want to state your back taxes case to the IRS so they may decide to waive penalties and fees, or reduce the tax debt overall.
  5. If you failed to pay your full tax liability and are now suffering with the remainder, you should speak with the IRS for debts under $5,000 and speak with a tax debt specialist for debts above $5,000 in order to set up an IRS payment plan.

If you are suffering with back taxes, let us help you minimize the late penalties and building interest that will balloon your tax debt to uncontrollable amounts. We've been helping taxpayers for more than 10 years seek Penalty Abatements, Innocent Spouse, Hardship Status, and Installment Agreements to successfully resolve their tax debt and prevent IRS collection actions.

Call now or fill out the form below for a free consultation about your back taxes. We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.

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