Back Taxes

Do you owe the IRS money? Millions of people owe back taxes, and many of them, like you, are afraid of the consequences. Contacting the IRS before they contact you is the first step in settling outstanding taxes. Many individuals assume that negotiating with the IRS is impossible, yet there is still hope.

Why Do I Owe the IRS Money?

Owing the IRS money usually results from filing a tax return where you have not paid the taxes yet. If you have not filed a return, the IRS might file a Substitute for Return (SFR) on your behalf, which will most likely cause you to owe money. It’s also possible that the IRS did not agree with the return you filed and made an additional assessment.

What Should You Do if You Have Unpaid Taxes?

If you have unpaid taxes, do not ignore the problem. It is very important to be proactive and figure out the problem before fixing it.

Contact the IRS to determine what your tax liability is and if you are missing any returns that need to be filed. Also determine whether the IRS has filed a Substitute for Return on your behalf.

What Are the Options to Resolve Unpaid Taxes?

The right option varies based on your situation. Here are some of the potential tax resolution options.

Prepare and File Unfiled Returns.

If you haven’t filed, you’ll need to file a return to figure out how much you owe and to get into an agreement with the IRS. Luckily, you don’t have to file decades' worth of returns. If you haven’t filed in a long time, the IRS typically only needs the last six years of returns. You can also file original returns for the years the IRS filed substitute returns on your behalf.

Ask for Penalty Abatement

Even if you don’t qualify for any of the programs where the IRS writes off some or all of your tax liability, you may be able to reduce your tax bill through penalty abatement. The IRS never removes penalties unless you specifically request it. So, you need to be proactive about applying for penalty abatement.

I propose presently not collectible status (CNC).

You owe the IRS money, but because of your current financial situation, you can’t pay them. If the IRS agrees that you can’t pay both your taxes and your basic living expenses using their standards, they will place your account into "currently non-collectible status."

Submit an Offer in Compromise

An offer in compromise is a federal program that allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability or doing so creates a financial hardship.

Request an Installment Agreement

An installment agreement is when you make monthly payments on your tax liability. The amount you pay and the time you will pay is determined by the type of installment agreement. The IRS will generally give you up to six years to pay the debt off in full.

Ask for Innocent Spouse Relief

Do you owe the IRS money due to your spouse or ex-spouse? If you didn't do anything wrong and didn't know about the extra tax bill, you might want to ask for "innocent spouse relief."

Are there penalties for unpaid taxes?

Yes, the IRS substantially penalizes you for not filing and paying your taxes. If you don't file your return and/or don't pay the taxes that are due on the return, you will most likely get fines and interest.

Get Help with Your Back Taxes

We can assist you regardless of the reason for your outstanding taxes. As previously mentioned, you first need to know how much you owe and whether you are missing any returns. We can help you research this. Once that is determined, we can select which debt resolution method is ideal for you. You can attempt to do this on your own if you're comfortable. However, working with a tax attorney makes the procedure easier and more likely to be successful.