If you have not paid up your taxes for previous years due to a lack of finances or forgetfulness, you are advised to take a proactive approach to taking back taxes help and wiping your tax debt slate clean.
What is a back tax?
A back tax is a tax on one’s earned income that has not been paid in the year in which it was due. Back taxes tend to accumulate interest and penalties the longer they aren’t paid. Taxpayers can have back tax at the federal, state and/or local levels.
What is tax debt?
Tax debt is the amount of money you are supposed to pay to the IRS owing to your failure to submit your taxes on time. The IRS is the revenue service of the United States federal government. It is the government agency responsible for tax law enforcement and tax collection.
Amendments to tax collection laws
In 2011, IRS introduced its “Fresh Start program”, aimed at giving late payers a ‘fresh start’ to help them get back on track with their due payments. The program includes accommodations such as the installment agreement and offer in compromise.
The IRS now allows for setting up a payment plan in which late payers can pay up in monthly installments. An offer in compromise, on the other hand, would require an amount lesser than the tax debt to be paid in lump sum.
These provisions can be accessed only if the IRS can affirm that your current financial condition demands such interventions to help ease up the pressure of the debt on you.
What happens if you do not fulfill your payments for a long period of time?
It is usually only after several months of having not paid your taxes that the IRS begins its collection efforts. The collection efforts may begin with computer generated letters but could lead to wage levies.
During a wage levy, the IRS would contact your employer telling them that you have “delinquent tax liabilities” and that the employer should pay your income to the IRS instead of to you.
This can severely damage your reputation and have a negative impact on your financial condition.
Back taxes help
You may choose to negotiate your back taxes with the IRS yourself. Another alternative is to take help from a tax resolution firm that has experienced attorneys on board to help deal with your problem.
Remember to always file your tax returns on time even if you can’t pay the whole sum. This helps reduce the penalties charged. Also, the longer you wait to clear your debt, the trickier can the process get. Proactive action is the key to wiping your slate of tax debt clean. To know more about visit: betterwaytax.com/