A Complete Guide to Getting Help With Back Taxes

A Complete Guide to Getting Help With Back Taxes

You know that not paying back taxes could mean tax penalties, so you want to know how and where to get help with back taxes. Start here.

Keyword(s): help with back taxes

According to the most recent data from the IRS, Americans owe a total of 114 million dollars in back taxes. There are many reasons why so many people are falling behind.

Some file late by mistake, and others miscalculate how much they owe. Some fail to file their taxes at all. 

Despite how far you fall behind, you still have to pay. If you don’t, you could face penalties, fees, and even jail time. 

The good news is that there are ways to get help with back taxes. Depending on your situation, the IRS might be willing to open a payment arrangement with you. 

That’s only one of the options that you have to catch up on your taxes. Keep reading to learn more.

What Are Back Taxes? 

Back taxes are income taxes from past years that haven’t been settled by their due date. Until you’ve paid the debt in full, it will gather countless penalties and fees. 

As you pay your taxes, the penalties will decrease, but it’s important to note that they’ll never drop down to zero. 

How to Get Help With Back Taxes?

If you owe back taxes, breathe easy. You’ve most likely heard horror stories of the IRS throwing people in jail for not paying their taxes, but it’s an exaggeration. 

The truth is, the IRS would rather work with you to receive their payment than put you in jail. That’s why they offer so many helpful programs. 

Payment Plans 

If your taxes were a bit more than you initially calculated, and you need more time to pay, you can negotiate a payment plan. 

A payment plan will allow you to take care of your overdue taxes in a series of installments. The IRS offers short and long-term plans. 

It costs nothing out of pocket to apply online for a short-term arrangement, and you’ll have 120 days to pay your debt. If you don’t think you’ll have the money within that time frame, you can apply for a long-term plan. You’ll have to pay a 31-dollar fee to apply online, but you’ll have as long as you need to settle your debt. 

Keep in mind that if you fall short on your monthly bill, the IRS can revoke your payment plan and demand that you pay the entire amount due. 

Currently-Not-Collectable 

If paying your taxes means that you won’t be able to afford your living expenses, you can talk to the IRS about putting your account in a “currently-not-collectible” status. 

You will be asked to fill out a form to prove that you’re not in a great place with your finances. When it’s processed and approved, your tax debt won’t go away, but it will be put on hold for the time being. 

Offer in Compromise

You can pay most of your back taxes, but you’re short by a few thousand dollars. You might be able to enter an offer in compromise deal with the IRS. 

If approved, the IRS will allow you to settle your back taxes for less than you owe.

Something to note is that the IRS does turn down most people for an offer in compromise, and it’s a 205 dollar fee to apply. It’s best to explore other avenues instead of going straight for this option. 

Hire a Tax Relief Company 

Dealing with the IRS all on your own can feel a bit overwhelming. That’s why many people reach out to a tax attorney or tax relief company. 

If you have any questions regarding your back taxes, they’ll be able to answer them. They can also represent you in front of the IRS and walk you through filling out any forms you need to complete to receive aid. 

What Will Happen If You Don’t Pay?

The IRS will give you plenty of time to contact them and enter an agreement of some kind before they begin to apply penalties to your account. 

If you don’t pay, the IRS may apply tax levies to your assets after a while, however, and interest will begin to build right away. 

You’ll Receive a Letter

Before anything happens to your account, the IRS will send you a warning letter in the mail. 

This letter will highlight all the tax penalties and fees you’ll face for not paying on time. 

Penalties Will Stack Up 

If you don’t contact the IRS to get help with back taxes, they’ll begin to apply penalties to your account. 

In this instance, the failure to pay penalty would be the one you would need to worry about. It applies a 0.5% fee to your unpaid tax debt. It stacks every month that you fail to settle your debt. 

You’ll Accrue Interest 

You’ll have a little while to get into contact with the IRS before you suffer penalties. Interest, on the other hand, is a bit different. 

Your account will begin to gather interest the minute you miss your return due date. 

The IRS Will Apply Tax Levies to Your Assets 

As a last resort, the IRS will begin to apply tax levies to your assets. What this means is that they can seize your wages, personal property, and bank accounts. 

If you’re entitled to a state tax refund, the IRS can take that to settle your debt as well. 

Take Care of Your Tax Debt 

Owing money to the IRS can be frightening, but don’t panic. As you can see, there are ways to settle your debt without jail time if you’re transparent with the IRS. 

Get in touch with them to apply for one of their many tax relief programs. If you need help filling out an application to get help with back taxes, contact our advanced tax team.