Back taxes are simply taxes that you owe that you didn't pay when they were due. If you've underpaid taxes for any reason, the balance that you owe is considered back tax. You may have failed to report taxable income (intentionally or unintentionally, it doesn't matter) – as the IRS sees it...you still owe them money in the form of a back tax.
Some people don't have the money when the tax bill comes around, so they just don't pay. They may plan on paying the money when they're able...but that time never seems to come around.
If nothing seems to happen or they don't get 'caught', some people start believing that they've somehow slipped under the radar of the IRS and that they're getting away with it. They're not. In fact it, might take years for the IRS to come after you, but they will eventually.
How Do You Know Your Back Tax Problem Is Getting Serious?
Here's how it happens:
- You'll get sent a Notice and Demand for Payment from the IRS.
- You either pay or don't pay the tax.
- If you don't pay, you'll be sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy.
That's when you know you've got big problems. That means in 30 days, the IRS is going to start helping themselves to the money in your bank account. If you've received a Final Notice of Intent to Levy, you need to take action immediately, if this has happened to you. There's absolutely no time to waste.
Once I investigate your case, I may find that there are a number of solutions that could keep the IRS from dipping into your bank account and causing you serious financial hardship:
- You may have some deductions coming to you that you didn't claim
- The IRS may have miscalculated your tax
- I may be able to negotiate a legal extension to the process
Plus, we may find out that:
- You could be Declared Non-Collectible Status
- You Could Have the debt reduced through an Offer-In-Compromise
- You Could Set up a monthly installment agreement plan
- You Could Set up a partial installment agreement (where you pay less than the total owed)