Help With Back Taxes: Your Guide to Resolution

Help With Back Taxes: Your Guide to Resolution

Back taxes refer to any taxed amounts not paid by their original due date. Discharged debts may also include income taxes, payroll taxes or other tax liabilities owed to the IRS or state tax agencies. Dimov CPA can provide the expertise you need to manage back taxes and resolve any issues that may arise.

 

What Are Back Taxes?

Back taxes refer to any income or payroll tax obligation that has not been paid in the time period required. These taxes can accrue interest and penalties when they remain unpaid, so the sooner you deal with them the better as it could cause serious financial distress.

 

Steps to Resolve Back Taxes

The following are the steps to resolving back taxes successfully:

1. Tax Filing: A consult to discuss your individual circumstances.
2. Get Your Documents Together: You need to have all the appropriate forms, including income information as well as prior tax returns.
3. Formulate Strategy: Plan action as will it be possible to establish a repayment strategy or seek penalty forgiveness for unpaid taxes.
4. Communicate With IRS: Deal with any and all communications that the IRS sends to represent your case from beginning to end.
5. Resolution and Follow Up: Firm up resolution and keep tracking to make sure similar tax issues do not re-occur.

 

 

 

Common Penalties Associated with Back Taxes Due

Consequence	Description
Penalties and Interest	Interest and penalties can add up quickly, increasing the total amount owed.
Liens	The IRS can attach liens to property, which often makes it challenging to sell the property.
Wage Garnishments	Tax collections can be collected through your paycheck.
Bank Account Levy	The IRS has the ability to reach in and take money out of your bank account.

 

How Back Taxes Are Accumulated Interest and Penalties

• Unpaid Taxes: Interest charged daily until completely settled.
• Failure-to-File Penalty: Up to a maximum of 25%, charged monthly on any taxes owed, if you didn’t file on time.
• Failure-to-Pay Penalty: Charged each month until the tax is paid, capped at 25% of the unpaid taxes.
• State penalties: States might add on other penalties or interest to unpaid state taxes.

 

 

How to Pay Off Back Taxes Over Time

• Payment Plan: Create a monthly payment plan with the IRS.
• Offer in Compromise: If you qualify, pay less than the total owed.
• Partial Payment Agreement: A monthly payment lower than what the full payments would be if you cannot afford to make them.
• Currently Not Collectible Status: Deferral of payments while finances are tight.

 

 

Benefits of Resolving Back Taxes

There are several benefits to resolving back taxes that can help improve your financial health:

• Stop Additional Penalties and Interest: By addressing unpaid taxes as soon as possible, you avoid all the extra penalties and interest that get added on later.
• Stop IRS Collection Efforts: No more IRS severe collection actions like wage garnishments, bank levies & property liens.
• Regain Financial Stability: Letting go of back taxes allows you to make better financial decisions because your money is no longer being owed elsewhere.
• Repair Your Credit: As we just mentioned, tax liens can impede your credit score, and paying them off becomes a step closer to handling that- making obtaining loans or credit an easier feat.
• Peace of Mind: Get rid of tax belongs to your mind and set your entire attention on other valuable economic tasks.

 

 

Our Services

Here are some of the customized services provided by Dimov CPA to fix back taxes:

• Filing Past Returns: File missing tax returns in order to reduce any money owed.
• Penalty Reduction: File for penalty abatement if you qualify.
• Installment Agreements: Establish an IRS payment plan that is manageable.
• Offer in Compromise: If you qualify, settle for less than the full amount by going to an Offer in Compromise with the IRS.
• Currently Not Collectible Status: When you do not have the ability to pay, but interest and penalties may continue to accrue while IRS collection is paused.

 

 

Conclusion

If you have back taxes due, it is important to address them quickly or else very serious consequences will develop as penalties accumulate. Dimov CPA is here with customized methods through which you can manage the tax control over yourself. Call today for an appointment to take the first step toward peace of mind about your finances.

 

FAQs

 

What are back taxes?

Back taxes are unpaid income, payroll or other taxes that were not paid on time as scheduled to a federal or state authority.

How can I resolve back taxes?

Dealing with back taxes means evaluating your personal situation, collecting records and developing an individualized payment plan (such as setting up an installment agreement or seeking out penalty relief).

Is Dimov CPA able to deal with the IRS for me?

Yes you can, Dimov CPA will take care of your IRS negotiations and communicate with them for you which means that they will represent your case intelligently.

What occurs if I refuse to pay my back taxes?

If you owe back taxes and do not repay them for a long time, the IRS can assess penalties, interest, place liens on properties/real estate you own or work to garnish your wages/income and even levy your bank account.

Can back taxes be reduced?

Of course, back taxes can sometimes be reduced due to penalty abatement, Offer in Compromise or through a payment plan that reflects your financial situation.

When does the IRS stop collecting, and how long do they have to collect back taxes?

Typically, once the IRS formally assesses a tax liability, it has 10 years to attempt collection before the debt becomes impossible to enforce.

Does resolving back taxes have a positive impact on my credit score?

Yes, clearing up back taxes — particularly when they result in liens — can benefit your credit score by eliminating blemishes and re-establishing creditworthiness.