Back Tax Liabilities

10 Tips For Taxpayers With Back Tax Liabilities

Below are 10 tips if you have back tax liabilities and need to attain tax resolution;

1. If you have an outstanding back tax liability it is best to pay the full amount immediately, whether you can afford to pay out of pocket, or you need to take a loan to pay it. The damage to your credit, and IRS penalties and interest will amount to much more than the amount of interest you will accrue on any loan from a friend or the bank.
2. If you have special circumstances, you may be eligible for additional time to make your payment. To find out if you can get more time to pay off your back taxes, call 800-829-1040 to speak to an IRS agent, or talk to one of our Tax Resolution Specialist to help you navigate the system more successfully.
3. If you are unable to pay your liability in full, you can request an installment agreement from the IRS, which allows you to pay monthly installments, instead of one lump sum. It is a good idea to seek competent representation to help you determine if an installment agreement is you best option.  You may want to review other options such as an Offer In Compromise, Innocent or Injured Spouse, penalty abatement or even bankruptcy
4. Consider paying your bill with a credit card, if you are unable to pay in cash, since the interest rate on a majority of credit cards is lower than the interest and penalties for owing back taxes liabilities to the IRS.
5. Consider paying your outstanding balance by Electronic Funds Transfer, if you are concerned about data or checks getting lost or compromised. This is an option that many taxpayers are unaware is available to them.
6. If your total balance due, including interest, penalties and original tax amount, is $25,000 or less, you have the option of requesting an installment agreement that utilizes the online payment agreement application. An installment agreement will give you more time to pay the balance in full. You may also the Form 9465 that was mail to you by the IRS with the balance. Once received the IRS will notify within 30 days whether your request has been approved, or not,.
7. Contact representation if your outstanding balance is between $25,000 and $50,000. A Form 433F, will likely need to be completed.  You will want to review if this is your best option
8. Make sure to take into account the user fees that will be added if you qualify for an Installment Agreement. The user fee for an installment agreement with a direct debit is $52 and other installment agreements are $120
9. If you consistent have an outstanding balance due with your return, you may want to change your W-4 with your employer, so that more money is withheld.  If you over-withhold to the point that you receive a refund, remember it will likely be applied toward your outstanding balance due.
10. No matter what your total back taxes amount, it is always a good idea to seek out a competent representation to help you navigate the complicated maze of the IRS.  You may want to review other options such as an Offer In Compromise, Innocent or Injured Spouse, penalty abatement or even bankruptcy

Unfiled Returns

IRS Business Delinquent Payroll Taxes | Consequences