Resolve Back Taxes
Back taxes refers to delinquent taxes which are overdue. Your record is researched to determine where you stand with the IRS, what you owe, what years are unfiled, what years are necessary to file and to acquire documentation to do those returns. Back taxes come into existence a few different ways.
- If a taxpayer fails to file returns for a number of years, the IRS will file returns for the taxpayer and thereby assess a tax.
- If a taxpayer is audited and the IRS determines more tax is due, a “back tax” is then also assessed against the taxpayer.
- When a taxpayer files returns but is unable to pay the tax due, then a back tax is assessed against the taxpayer.
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How Can I Resolve IRS Tax Debt that I Cannot Afford to Pay?
There are a few processes to resolve an unpaid IRS debt. By far, the most common is to enter into an installment arrangement with the IRS by communicating with the IRS Collection Division. There are numerous ways to enter into and negotiate terms of an installment arrangement with the IRS. Please note, some on-line services assert that there is an unnegotiable formula so as to entice you to use their automated services. This is not true. A lot of negotiating room is available with installment arrangements (which includes non-collectible status).
Will I Owe Penalties for Back Taxes?
Generally, penalties accrue when a taxpayer fails to file and/or pay taxes on time. The IRS will sometimes abate the penalties if the taxpayer can meet a legal standard known as reasonable case. Usually, reasonable case means that the taxpayer was a victim of crime, substance abuse, mental disease or natural disaster. The taxpayer must have some sort of documentation to prove the event.