When taxpayers fail to pay their taxes in full within the year these taxes are due,the unpaid amounts are called back taxes. If these taxes remain unpaid,they accumulate penalties and interests and cause serious repercussions on the taxpayers’ finances. While it can be worrying for many taxpayers,there are ways that they can deal with this situation.
What to Do When You Owe Backtaxes
The first thing to remember about owing back taxes is that it is never a good idea to ignore them and hope they will go away,as noted by top -. The IRS is bound to find out sooner than later and the consequences may prove extremely unfavorable. When you owe backtaxes,you can try the following methods:
Streamlined Installment Agreement
This is a preferred first step among taxpayers because it is relatively easy and is offered to taxpayers with liabilities equal to $50,000 or lower. The request to pay back the taxes using an installment scheme can be done by filing Form 9465,which is the Installment Agreement Request. The request may also be filed online through the Online Payment Agreement Application on the IRS website. Once approved,the IRS may allow the taxpayer to pay back the loan for a certain period,sometimes for as long as six years.
Working With Revenue Officers
If the Streamlined Installment Agreement is not an option or if the tax amount owed is bigger,a taxpayer may choose to work with revenue officers. These are field personnel deployed by the IRS who can assist the taxpayer in resolving the problem,provided that the taxpayer is cooperative and shows proof that he/she has every intention to pay what he/she owes. When this happens,call a-.
CompromiseIf paying off the debt through an installment agreement within a six-year period seems impossible,the taxpayer may opt in compromise to get the debt settled in full but at a discounted amount by filing Form 656. The taxpayer has to come up with the necessary funds to pay the IRS but at least he/she can resolve the issue effectively.
