Many people don’t know the options that are available to them when dealing with back taxes and the IRS.
Back taxes are a nightmare for anyone that owes the IRS money without the means of paying it. If you are already in debt, the IRS banging on your door doesn’t help your situation—it just makes it more stressful. If you owe a lot of back taxes, you don’t have to panic; you have options. Let’s discuss.
First, What Are Back Taxes?
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
- Neglecting to file a tax return
What Happens if a Taxpayer Doesn’t Pay Back Taxes?
Unpaid back taxes can be a serious issue for many taxpayers who don’t have the means to pay them. If a taxpayer does not pay back taxes they owe, they can face a range of consequences from the government. Some strategies the government may use to get a taxpayer to pay back taxes include:
- Pressing charges
- Demanding the taxpayer pay immediately
- Offer a voluntary disclosure program (to help avoid criminal charges)
- Offer payment options
If back taxes are not paid, some consequences may include IRS:
- Seizing property
- Seizing assets
- Placing liens on the property
- Placing a federal tax lien to inform other creditors of the taxing authority’s legal right to a taxpayer’s assets and property.
- Garnishing a taxpayer’s wages and to levy their financial accounts, seizing up to the total amount of taxes owed.
Failure to pay taxes can also involve imprisonment.
However, if you owe back taxes, you don’t need to panic. Let’s take a look at some of your options.
What Are Your Options For Handling Back Taxes?
Some solutions our San Diego back tax attorneys can provide include:
A Payment Plan
Agreeing on a monthly payment amount that is feasible and not strenuous can make all the difference. Our tax lawyer can help facilitate an agreed amount that works for both you and the IRS.
An Offer in Compromise
An offer in compromise allows you to settle your debt with the IRS for much less than what you owe.
When you declare non-collectible, the IRS immediately stops trying to collect from you for approximately one to two years.
Abatement of Penalties
Through this method, you can seriously reduce the amount you owe the IRS, by reducing the costs of the penalties and interest against you.
Contact Milikowsky Tax Law
If the IRS is telling you to pay your back taxes in a payment plan you can’t afford, contact our San Diego back tax lawyer today. Our legal team at Milikowsky Tax Law is well-versed in tax law procedures and options; we are ready to assist you through this difficult time.
Our committed tax law firm can answer your questions, explain your options, and guide you towards the best game plan for you. At Milikowsky Tax Law we are experts in providing legal counsel for dealing with unpaid taxes.