Many taxpayers get a refund from the IRS when they file their taxes, but a large number of people do not. People who owe taxes or suspect they might owe may decide to not file for a year or even for many years. Then they receive a large tax bill from the IRS. It is important that you not ignore this bill. While it may feel intimidating, working with the IRS when you owe back taxes is possible. You can choose to contact the IRS directly and settle the matter or find legal help with your taxes.
Remember, it’s Usually an Estimate
If you have not paid for many years, the IRS will estimate the amount of taxes you owe. This estimate may not reflect your current situation. You may have dependents that you could claim that will reduce your tax liability. You may own a small business with expenses that could offset the amount the IRS says you owe. Before panicking, take some deep breaths and analyze the situation. You can find tax forms online for years past and fill them out. You can then see exactly how much you owe, but do not forget about penalties and interest.
If You Agree with the Amount Owed
If you feel that the amount owed to the IRS is accurate, you can resolve your tax bill by simply paying the bill. You can easily settle your tax bill using the IRS’ Direct Pay tool, which withdraws the money from your checking or savings account. Based on certain criteria, you can also set up a monthly payment plan, get an extension, or offer a compromise. A compromise allows you to settle your account with the IRS by paying less than you owe. This is often used if paying the full amount would cause you financial hardship.
Many taxpayers choose to work with an attorney that specializes in taxes and tax law. The process of working with the IRS to settle a tax debt can feel daunting and discouraging. A tax attorney can assist you by helping you find out how much you truly owe and negotiating with the IRS. Often, a tax attorney could settle the debt with the IRS for only a fraction of what is owed.
A tax attorney can also help you if your wages have been garnished or the IRS has placed a levy on your bank accounts. They can assist in removing tax liens from your property and correspond with the IRS on your behalf. Above all, having an attorney who knows tax law and how to deal with the IRS can relieve stress because you know that you have someone experienced who will handle the situation for you. It is best to deal with back taxes as soon as possible since the IRS is allowed to attempt to collect tax debts for ten years.
For more information on tax penalties, please visit https://en.wikipedia.org/wiki/IRS_penalties. For general information about tax debt, please visit http://www.businessdictionary.com/definition/tax-debt.html. It is crucial that you take any steps needed to settle your tax debt as soon as possible.