If you owe back taxes to the IRS, it is understandable that you would feel some level of panic. Having the federal government’s support on its side, the IRS wields a great deal of power and control when it comes to enforcing tax laws and collecting back taxes. They are unarguably the most aggressive collection agency on the planet.
What Happens When You Don’t Pay Your Taxes
You could face significant repercussions when you owe back taxes to the IRS and do nothing about it. If you don’t take heed to any communications that the IRS sends to collect your tax debt, you risk having your bank account seized or your wages garnished. The IRS can also file a Federal Tax Lien, which makes it extremely difficult, if not impossible, to obtain financing for a house or a vehicle. Interest and penalties accrue daily, so ignoring or delaying the problem only worsens the situation.
How to Deal With Back Taxes
Rather than panicking about your tax debt and hoping it will go away, you should take proactive steps and start taking action to resolve the problem.
Here are the three things you can do to get a handle on your tax debt:
1. Verify the Amount Owed
The first thing you can do when dealing with back taxes is to confirm that you owe the money. Despite its reputation, the IRS has made numerous errors and is by no means foolproof. To find out how much money you owe, contact the IRS or have us conduct an IRS transcript analysis.
2. Look for Deductions You May Have Overlooked
Once you confirm the amount you owe the IRS, it is time to check your tax returns for deductions and credits that you may have overlooked in the past or the current year.
Unless you know a lot about taxes, you will probably need help from a professional to do this. You can ask your CPA or a tax expert to look at your past tax returns. However, only a tax resolution expert can protect your income and assets as you go through the process of dealing with back taxes.
If you missed deductions or tax credits, your tax pro could file amended returns. This will help you lower or eliminate your tax debt. In most cases, however, you can’t amend returns further than three years.
3. Search for Special Programs You May Be Eligible For
The IRS offers several programs to help taxpayers deal with back taxes. In certain instances, the IRS may even accept a settlement that’s significantly less than the total amount of back taxes you owe.
Keep in mind that these programs are not available for everyone. The IRS will unlikely grant you leniency if you have the financial means to pay your back taxes. However, the IRS may decide to accept a small tax repayment over none if resources are scarce.
Reasons to Work With a Tax Resolution Specialist to Deal With Back Taxes
Finding programs for which you may qualify will likely require the assistance of an experienced tax resolution professional. This type of experience is uncommon among CPAs. Negotiating with the IRS to deal with back taxes is not easy. You may need help if you want to get the best bargain and lower your back taxes. Paying a tax resolution expert to negotiate on your behalf may be well worth it in the long run, especially if you end up with a significantly lower tax bill.
It is easy to panic when you owe back taxes, but you should not let fear prevent you from resolving the situation. The problem is likely to get worse the longer you put it off, so the sooner you do something about it, the better off you and your money will be. Every problem with the IRS has a solution. Let us see if you qualify for any IRS tax debt settlement programs today!