What to Do If You Owe Back Taxes

Do you owe taxes from years ago? Back taxes can exist for a variety of the reasons. Maybe you didn’t file your tax forms. Perhaps you chose to evade your taxes on purpose. You might not have even realized you owed taxes. Maybe you were given incorrect information by an employer or calculated incorrectly so you underpaid.

Whatever the reason, the fact is that you owe taxes. Regardless, of the reason you have back taxes, don’t let them keep accumulating. By visiting this page, you’ve already taken a step towards eliminating your back taxes. Don’t turn back now. If it is just a matter of not filing returns, try to get those late returns filed.

When filing late returns, remember to:

File them on paper. Late returns can’t be filed electronically.
Mail tax returns from different years in separate envelopes. Doing so helps the IRS sort your returns out better.
Send to the U.S. Postal Service by certified mail, return receipt requested.

If you’ve already filed returns but underpaid or the payment amounts are just too much, you could use the help of a tax professional. While it may be tempting to try to forget the taxes you owe, penalties and interest accumulate on the taxes and can add thousands of dollars so it is best to at least negotiate with the IRS to get the taxes paid off. Doing nothing to resolve your tax problem simply means continuing to live with the problem and making it worse.

Owing back taxes can cause may negative consequences including:

Wage garnishment
IRS audit
Penalties
IRS Levy
Federal Tax Lien
Innocent spouse consequences
Bankruptcy

A tax professional may be able to help you reduce penalties or interest that you have accumulated. One way to get rid of back taxes is to pay them in full, but there are other options for taxpayers who want to do something about their back taxes but cannot afford a one-time payment. The professionals here at Centsable Accounting, Inc., The Tax Problem Solvers may be able to help you set up a monthly payment plan. Remember that you don’t have to live with past due taxes.