Back Taxes Help
Owe back taxes? We know how stressful that can be. Take the first step toward financial freedom by calling us.
WHAT TO DO IF YOU OWE BACK TAXES TO THE IRS
FILE BACK TAXES IMMEDIATELY
The IRS won't work with you unless you are current with your filing obligations. Once you file, you'll be able to set up a payment plan, apply for lien removal, or a settlement.REQUEST A SHORT TERM EXTENSION
If you can pay the full amount of your IRS debt in 120 days or less, you may qualify for a short-term extension. You can apply for these on the IRS website, and there is no set-up fee.SET UP INSTALLMENT AGREEMENT
If you cannot pay your back tax debt in full within 120 days, the IRS also offers long-term payment plans known as Installment Agreements. Payments are extended over 4 months or more, and set-up fees range from $31 to $225, depending on how you apply.APPLY FOR OFFER IN COMPROMISE
An offer in compromise is an IRS program that allows you to make an offer of less than the total amount owed toward your back tax debt. If the agency accepts the offer, you will pay your settlement amount, and the rest of your IRS debt will be wiped clean.What Happens If You Owe Back Taxes?
Taxes are already complicated and stressful, but if you
fall behind on filing, things can get messy very quickly.
As penalties and interest pile up, taxpayers often find it more and more difficult to address the “black cloud” of back taxes hanging over them. The longer they wait, the more complicated it becomes to calculate how much they owe, and the more stressful it becomes to even think about facing their debt.
We see this every day at Rantax. Ashamed of missing filing deadlines and letting their debt grow, many people with back taxes will wait years before seeking help. However, once they come in for their initial consultation, our clients often say they’ve felt a weight lifted from their shoulders.
Even the most responsible individuals and business owners make mistakes, and there’s no reason to feel bad about missing a filing or payment deadline. It literally happens to millions of Americans every year, and the IRS offers plenty of helpful programs for resolving your tax debt.
In other words: if you owe back taxes to the IRS, you are not alone — and you do have options. But the worst thing you can do is leave your debt unaddressed.
If you think you owe back taxes, don’t let the situation worsen. Take the first step toward financial freedom by scheduling a free consultation with our licensed accountants.
In this guide, we’ll go over what happens when you don’t file your taxes, what sorts of collection actions the IRS might pursue, and what options you have to pay off your back taxes debt.
As penalties and interest pile up, taxpayers often find it more and more difficult to address the “black cloud” of back taxes hanging over them. The longer they wait, the more complicated it becomes to calculate how much they owe, and the more stressful it becomes to even think about facing their debt.
We see this every day at Rantax. Ashamed of missing filing deadlines and letting their debt grow, many people with back taxes will wait years before seeking help. However, once they come in for their initial consultation, our clients often say they’ve felt a weight lifted from their shoulders.
Even the most responsible individuals and business owners make mistakes, and there’s no reason to feel bad about missing a filing or payment deadline. It literally happens to millions of Americans every year, and the IRS offers plenty of helpful programs for resolving your tax debt.
In other words: if you owe back taxes to the IRS, you are not alone — and you do have options. But the worst thing you can do is leave your debt unaddressed.
If you think you owe back taxes, don’t let the situation worsen. Take the first step toward financial freedom by scheduling a free consultation with our licensed accountants.
In this guide, we’ll go over what happens when you don’t file your taxes, what sorts of collection actions the IRS might pursue, and what options you have to pay off your back taxes debt.
What happens If you don't file your taxes?
If you don’t file your taxes by the deadline, you will
face penalties and interest that will add to the amount
that you owe. The IRS issues separate penalties for filing
late versus paying late — this is why it’s important to
file your taxes on time every year (or apply for an
extension), even if you cannot afford to pay the tax you
owe.
Back-Taxes: Penalty Fees for Individuals
Failure-to-file penalty : If you don’t file, you’ll face a failure-to-file penalty fee, which is 5% of your unpaid taxes for each month your tax return is late, up to 25%. In addition, payments made more than 60 days late will also incur a minimum fee of $135 or 100% of the taxes you owe (whichever is less).
Failure-to-pay penalty : If you file your taxes, but do not pay them on time, you’ll be charged a failure-to-pay penalty fee. This is 0.5% of your unpaid taxes for each month you don’t pay, up to 25% of the back taxes owed. Plus, you will be charged interest on the unpaid amount.
These penalties and interest apply for each month or partial month after the payment due date, and they start accruing the day after the tax-filing due date.
Back-Taxes: Penalty Fees for Small Business Owners
As a small business owner, you withhold payroll taxes from employee wages. This means that you must:
* Report and pay federal and state taxes to the appropriate tax agencies
* Accurately report income, amounts withheld, and amounts paid on behalf of employees and contractors
* Maintain required federal and state records
Payroll taxes are paid on either a biweekly or monthly basis. Employers are required to report their payroll tax payments on a quarterly basis by filing Form 941. This form requires an employer to add up the total payroll tax contributions within the given quarter.
However, if you don’t make payroll tax deposits accurately and on time, you will face additional penalties. And because the vast majority (about 70%) of the annual tax revenue collected by the IRS comes from payroll taxes, the IRS is quick to send notices in these situations.
In addition to the penalty fees, not paying payroll back taxes could also result in criminal fines and even imprisonment.
When it comes to payroll taxes, failure-to-pay penalty fees increase quickly — every day that ticks by, you’re losing money. Therefore, especially in these situations, it’s imperative that you take action in a timely fashion.
Back-Taxes: Penalty Fees for Individuals
Failure-to-file penalty : If you don’t file, you’ll face a failure-to-file penalty fee, which is 5% of your unpaid taxes for each month your tax return is late, up to 25%. In addition, payments made more than 60 days late will also incur a minimum fee of $135 or 100% of the taxes you owe (whichever is less).
Failure-to-pay penalty : If you file your taxes, but do not pay them on time, you’ll be charged a failure-to-pay penalty fee. This is 0.5% of your unpaid taxes for each month you don’t pay, up to 25% of the back taxes owed. Plus, you will be charged interest on the unpaid amount.
These penalties and interest apply for each month or partial month after the payment due date, and they start accruing the day after the tax-filing due date.
Back-Taxes: Penalty Fees for Small Business Owners
As a small business owner, you withhold payroll taxes from employee wages. This means that you must:
* Report and pay federal and state taxes to the appropriate tax agencies
* Accurately report income, amounts withheld, and amounts paid on behalf of employees and contractors
* Maintain required federal and state records
Payroll taxes are paid on either a biweekly or monthly basis. Employers are required to report their payroll tax payments on a quarterly basis by filing Form 941. This form requires an employer to add up the total payroll tax contributions within the given quarter.
However, if you don’t make payroll tax deposits accurately and on time, you will face additional penalties. And because the vast majority (about 70%) of the annual tax revenue collected by the IRS comes from payroll taxes, the IRS is quick to send notices in these situations.
In addition to the penalty fees, not paying payroll back taxes could also result in criminal fines and even imprisonment.
When it comes to payroll taxes, failure-to-pay penalty fees increase quickly — every day that ticks by, you’re losing money. Therefore, especially in these situations, it’s imperative that you take action in a timely fashion.
BACK TAX PREPARATION PROCESS
1
Step 1 : Gather Your Documents
Locate your W-2 and 1099 forms for the tax years you’re
filing for, as well as any other information regarding
income earned for that period. You can also request your
wage and income transcript from the IRS. We can request
your transcripts on your behalf, as well.
2
Step 2 : Prepare Your Returns
Any tax returns from previous years must be filed using
the specific tax rules and instructions for those years.
If you use incorrect forms or guidelines, it can cause
even more problems for you.
3
Step 3 : Plan For Payment
If you owe taxes on your unfiled returns and can’t pay,
you’ll need to utilize an alternative tax relief solution
to resolve your IRS debt. For instance, you may need to
request an installment agreement, which allows you to pay
your tax debt over monthly payments instead of one lump
sum.
4
Step 4 : Request Penalty Abatement
If you only have one past-due tax return, you may be
eligible for first-time penalty relief. This can help
erase, or reduce, the penalties assessed to your overdue
return.
5
Step 5 : Submit Your Returns
Late tax returns can only be filed on paper and must be
delivered to your local IRS Service Center either in
person or by postal mail. Be sure to use certified mail,
so you have proof that the IRS received your returns. Each
return should be sent in a separate envelope to avoid
potential confusion or clerical errors.
*** The IRS has started accepting the past 3 year tax returns electronically
*** The IRS has started accepting the past 3 year tax returns electronically
Here's How We Can Help
Back Taxes Help
If you need help filing back taxes, we can quickly file
all missing returns and get your tax record current. With
our full-service tax relief and accounting departments
working under one roof, you can look forward to a faster
resolution by ditching the delays of outsourcing.
IRS Installment Agreements
Pay your debt in installments by qualifying for a payment
plan with the IRS.
If you’re unable to pay your tax debt off in full, an extended payment plan with the IRS may ease your financial burden. Our specialists will help you qualify for an installment agreement by filing the necessary paperwork and negotiating directly with the IRS.
If you’re unable to pay your tax debt off in full, an extended payment plan with the IRS may ease your financial burden. Our specialists will help you qualify for an installment agreement by filing the necessary paperwork and negotiating directly with the IRS.
Penalty Abatement
Penalties and interest piling up? Our tax relief team can
help get them removed.
If your tax debt is snowballing out of control due to accrued penalties and interest, qualifying for an IRS penalty abatement can reduce your tax bill significantly. From submitting an abatement request to negotiating directly with the IRS, our team of accountants will fight to get your penalties removed.
If your tax debt is snowballing out of control due to accrued penalties and interest, qualifying for an IRS penalty abatement can reduce your tax bill significantly. From submitting an abatement request to negotiating directly with the IRS, our team of accountants will fight to get your penalties removed.
Lien and Levy Removal
Have you received a final notice of intent to levy from
the IRS? You have options.
Years of delinquent taxes often force the IRS to take drastic collection actions in the form of liens or levies. If your bank account has been levied by the IRS to collect a previous debt, we can help minimize the damage by getting it removed.
Years of delinquent taxes often force the IRS to take drastic collection actions in the form of liens or levies. If your bank account has been levied by the IRS to collect a previous debt, we can help minimize the damage by getting it removed.
Audit Defense
Defending an audit? Know your rights.
If you’ve received a CP2000 from the IRS, there’s a very good chance that you’re dealing with an audit. Tagging in a team of licensed tax professionals to represent you before the IRS is the most important thing you can do to protect yourself. We will be your audit defense armor and effectively fight back against the IRS on your behalf.
If you’ve received a CP2000 from the IRS, there’s a very good chance that you’re dealing with an audit. Tagging in a team of licensed tax professionals to represent you before the IRS is the most important thing you can do to protect yourself. We will be your audit defense armor and effectively fight back against the IRS on your behalf.
Garnishment Help
IRS seizing your paycheck? Stop wage garnishments now.
If your wages are being garnished by the IRS to collect an unpaid tax debt, there are ways to get it removed even after the garnishment has started. Stop the IRS from taking your hard-earned money with the help of our team. Let our licensed tax pros negotiate directly with the IRS on your behalf and remove unwanted wage garnishments quickly.
If your wages are being garnished by the IRS to collect an unpaid tax debt, there are ways to get it removed even after the garnishment has started. Stop the IRS from taking your hard-earned money with the help of our team. Let our licensed tax pros negotiate directly with the IRS on your behalf and remove unwanted wage garnishments quickly.
Tax Relief Solutions: What To Do If You Can’t Pay Back Taxes?
Okay, so you’ve sent in all of your unfiled tax returns,
and now you finally have a confirmed balance of what you
owe the IRS. But what if you can’t afford your tax bill?
Luckily, the IRS offers several helpful programs for taxpayers looking to satisfy their back-tax debt. Here are some of the most common options for people who owe back taxes but cannot pay:
Short-Term Extension
If you can pay the full amount of your IRS debt in 120 days or less, you may qualify for a short-term extension. You can apply for these on the IRS website, and there is no set-up fee.
Installment Agreement
If you cannot pay your back tax debt in full within 120 days, the IRS also offers long-term payment plans known as Installment Agreements. Payments are extended over 4 months or more, and set-up fees range from $31 to $225, depending on how you apply.
There are several different types of IRS installment agreements, some of which require verification of your financial status.
Offer-In-Compromise
An offer in compromise is an IRS program that allows you to make an offer of less than the total amount owed toward your back tax debt. If the agency accepts the offer, you will pay your settlement amount, and the rest of your IRS debt will be wiped clean. However, the IRS will only accept your offer if they feel that it is greater than or equal to the amount they would ever collect from you.
There are two major points to understand about the OIC process. Firstly, most offers get rejected (about 60 percent) — the odds are not in your favor.
Secondly, outside of an audit, an OIC is the most scrutinizing process a taxpayer can experience. Because of the significant savings associated with tax settlements, the IRS specialist assigned to your case will investigate past and current financial transactions, along with any property and assets.
In short, every aspect of your financial life will be probed and prodded until no stone is left unturned. The whole thing can be intrusive, unsettling, and extremely stressful, so you should consult with a licensed tax professional before considering this route.
Currently-Not-Collectible Status
If you can prove to the IRS that you are currently facing financial hardship, they may agree to grant you Currently Not Collectible (CNC) status. This is a two-year relief period during which the IRS cannot pursue collections and you are not required to make payments toward your back taxes debt.
Take Your First Step Toward Tax Debt Freedom
As we covered at the start, one of the hardest parts of tackling back taxes is simply getting started. At Rantax, we’ve tried to make that first step a little bit easier through our free back taxes consultation. Once you schedule your initial appointment, you’ll be on your way to tax debt freedom.
Here’s what to expect from our licensed tax professionals at your 30-minute tax relief consultation:
1. Review Your Case
To get a better understanding of your particular back taxes situation, our Tax Accountant will ask you about the amount of debt you owe, which years are left unfiled, and any extenuating circumstances that hampered your ability to file or pay on time. Although some of these questions may be uncomfortable to answer, it’s important that we get a clear understanding of what caused your tax debt so we can give you an honest assessment and find the best possible solution.
2. Explore Potential Tax Relief Options
Once we have gathered all relevant information pertaining to your back taxes, we will review your potential tax relief services. This includes providing a step-by-step plan and timeline for resolving your tax debt, as well as discussing the fees associated with these services. We will answer any questions you have about the process. Remember, you are not obligated to purchase any of the services suggested and may choose to decline our help.
3. Get To Work
If you decide to move forward with our tax resolution services, we will ask you to sign a service agreement, as well as IRS Form 8821, Tax Information Authorization. This form allows Rantax to contact the IRS on your behalf, review your tax file, and determine whether a revenue officer has been assigned to your case. Once all information is verified, we’ll get to work resolving your back taxes as quickly as possible!
Luckily, the IRS offers several helpful programs for taxpayers looking to satisfy their back-tax debt. Here are some of the most common options for people who owe back taxes but cannot pay:
Short-Term Extension
If you can pay the full amount of your IRS debt in 120 days or less, you may qualify for a short-term extension. You can apply for these on the IRS website, and there is no set-up fee.
Installment Agreement
If you cannot pay your back tax debt in full within 120 days, the IRS also offers long-term payment plans known as Installment Agreements. Payments are extended over 4 months or more, and set-up fees range from $31 to $225, depending on how you apply.
There are several different types of IRS installment agreements, some of which require verification of your financial status.
Offer-In-Compromise
An offer in compromise is an IRS program that allows you to make an offer of less than the total amount owed toward your back tax debt. If the agency accepts the offer, you will pay your settlement amount, and the rest of your IRS debt will be wiped clean. However, the IRS will only accept your offer if they feel that it is greater than or equal to the amount they would ever collect from you.
There are two major points to understand about the OIC process. Firstly, most offers get rejected (about 60 percent) — the odds are not in your favor.
Secondly, outside of an audit, an OIC is the most scrutinizing process a taxpayer can experience. Because of the significant savings associated with tax settlements, the IRS specialist assigned to your case will investigate past and current financial transactions, along with any property and assets.
In short, every aspect of your financial life will be probed and prodded until no stone is left unturned. The whole thing can be intrusive, unsettling, and extremely stressful, so you should consult with a licensed tax professional before considering this route.
Currently-Not-Collectible Status
If you can prove to the IRS that you are currently facing financial hardship, they may agree to grant you Currently Not Collectible (CNC) status. This is a two-year relief period during which the IRS cannot pursue collections and you are not required to make payments toward your back taxes debt.
Take Your First Step Toward Tax Debt Freedom
As we covered at the start, one of the hardest parts of tackling back taxes is simply getting started. At Rantax, we’ve tried to make that first step a little bit easier through our free back taxes consultation. Once you schedule your initial appointment, you’ll be on your way to tax debt freedom.
Here’s what to expect from our licensed tax professionals at your 30-minute tax relief consultation:
1. Review Your Case
To get a better understanding of your particular back taxes situation, our Tax Accountant will ask you about the amount of debt you owe, which years are left unfiled, and any extenuating circumstances that hampered your ability to file or pay on time. Although some of these questions may be uncomfortable to answer, it’s important that we get a clear understanding of what caused your tax debt so we can give you an honest assessment and find the best possible solution.
2. Explore Potential Tax Relief Options
Once we have gathered all relevant information pertaining to your back taxes, we will review your potential tax relief services. This includes providing a step-by-step plan and timeline for resolving your tax debt, as well as discussing the fees associated with these services. We will answer any questions you have about the process. Remember, you are not obligated to purchase any of the services suggested and may choose to decline our help.
3. Get To Work
If you decide to move forward with our tax resolution services, we will ask you to sign a service agreement, as well as IRS Form 8821, Tax Information Authorization. This form allows Rantax to contact the IRS on your behalf, review your tax file, and determine whether a revenue officer has been assigned to your case. Once all information is verified, we’ll get to work resolving your back taxes as quickly as possible!
Frequently Asked Questions
How Many Years Can I File Back Taxes?
Six years. The IRS prefers that you file all back tax
returns for years you have not yet filed. That said, the
IRS usually only requires you to file the last six years
of tax returns to be considered in good standing.
How Long Can The IRS Collect Back Taxes?
10 years. The IRS statute of limitations is the time
period after which the IRS can no longer collect on back
tax debt. It is typically a time limit of 10 years from
the time of penalty. The due date is known as the
Collection Statute Expiration Date (CSED).
How Many Years Can I File Back Taxes and Get A Refund?
Three years. A return claiming a refund must be filed
within three years of its due date for the IRS to issue a
refund.
How Much Do I Owe In Back Taxes?
You can access your federal tax account through a secure
login at the IRS website. Once in your account, you can view
the amount you owe along with details of your balance, view
18 months of payment history, access Get Transcript, and
view key information from your current year tax return.