Tax Resolution

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Taxpayers that fail to file their tax return for one or more years for various reasons can become overwhelmed later on down the road when attempting to file all their missing tax years at once. Missing all or a portion of their records, personal hardship and/or neglect are some of many reasons people fall behind in filing their taxes. Fortunately, there are ways to approach the problem of unfiled tax returns.

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Tax Resolution

Back taxes are taxes that have been partially or fully unpaid in the year that they were due. Taxpayers can have unpaid back taxes at the federal, state and/or local levels. Back taxes accumulate interest and penalties on a regular basis.

Understanding Back Taxes

Back taxes refer to taxes owed from a prior year. A taxpayer may be behind in paying taxes for intentional or unintentional reasons. Some of these reasons include—filing a return and failing to pay the tax liability; failing to report all income earned during the tax year, and; neglecting to file a tax return. If the taxpayer doesn’t file a tax return, the failure to file penalty is 0.5% of the amount due.

That penalty applies every month or part of a month until the tax is paid in full or until the penalty reaches 25% of the tax owed. In addition, the IRS charges interest on the unpaid amount. The interest rate charged by the IRS changes quarterly. As of the third quarter of 2020, the interest rate is 3%. As the total tax debt increases each month due to penalties and interest, over time, it can grow into a significant amount.

Unpaid back taxes can be a serious issue for many taxpayers who don’t have the means to pay them. Depending upon the circumstances, the government may take one of many strategies to deal with back taxes, such as pressing charges, demanding that the taxpayer pay immediately, or sometimes offering a voluntary disclosure program that helps avoid criminal charges and allows a variety of payment options. Failure to pay taxes can also involve imprisonment.

Consequences for Unpaid Back Taxes

In some cases, the IRS will seize property, seize assets, or place liens on the property. The IRS may place a federal tax lien to inform other creditors of the taxing authority’s legal right to a taxpayer’s assets and property.

The IRS also has the power to garnish a taxpayer’s wages and to levy their financial accounts, seizing up to the total amount of taxes owed. If the taxes remain unpaid, the tax authority can use a tax levy to legally seize the taxpayer’s assets (such as bank accounts, investment accounts, automobiles, and real property) in order to collect the money it is owed. While a lien secures the government’s interest or claims in an individual’s or business’ property when the tax debt remains unpaid, a levy actually permits the government to seize and sell the property in order to pay the tax debt.

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    What others say about us

    Advanced Tax Team made it easy by filing back tax returns and working with the IRS on my behalf. They settled a payment plan with the IRS that I can actually afford. They’re my tax firm for life.

    I called Advanced Tax Team when I received an IRS notice. They prepared all my back tax returns. I owed a lot, but they worked with the IRS and significantly lowered my debt. Thank you, Advanced Tax Team!

    I’m so glad I found Advanced Tax Team. I owed back taxes and the IRS started taking them from my paycheck. Advanced Tax Team got them to stop the garnishment immediately, then negotiated with the IRS to reduce what I owed.

    My business got behind on payroll taxes. The IRS could’ve taken everything I worked my whole life for. I called Advance Tax Team. They worked with the IRS to keep it open and running. I’m so grateful!

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