Back taxes can be daunting to deal with. But don’t worry. You have options, even if it feels like you don’t. Below, our team of experienced tax attorneys walks you through how to handle back taxes quickly to avoid costly penalties and audits.
What Are Back Taxes?
Back taxes are any taxes you didn’t pay at the time they fell due.
How do back taxes occur? Typically, it’s due to an oversight. Maybe you misclassified an employee as a contractor, and now you owe payroll taxes. Or maybe you just forgot to file your tax return on time.
The problem is the same, no matter how the tax debt occurred. You now have tax debt, and this debt has consequences. The consequences of back taxes can include:
- Wage garnishment
- Tax lien or tax levy
- Property seizure
- Tax audits
- Interest charges
- Tax penalties
The good news is that it’s possible to stop tax debt from spiraling. Here are five tips for taking back control.
1. Accept the Problem
This may sound obvious, but ignoring the problem won’t make it go away. The IRS certainly won’t forget that you owe taxes! In fact, the IRS starts adding penalty charges and interest as soon as taxes fall overdue.
To stop these debts adding up, the first step is accepting that you have back taxes and that you need to find a way to repay them. If you’re facing this problem during tax season, file your tax return on time anyway and start thinking of a game plan. Our experienced tax lawyers can help.
2. Know Your Legal Options
The IRS can be slow to respond and difficult to deal with, particularly for the average person who isn’t familiar with complex tax laws. Thankfully, there are many options for paying back taxes—even if it seems like an impossible situation right now. The most common options include:
- Filing for an extension
- Setting up an IRS payment plan
- Asking the IRS to delay collections temporarily
- Negotiating reduced penalties
- Using Innocent Spouse Relief to clear debt incurred by a spouse or former spouse
- Negotiating to pay less tax than you actually owe (if you truly have no means to pay the whole debt)
Our knowledgeable tax debt attorneys can explain what options are open to you, depending on your situation.
3.Don’t Overextend Yourself
Sometimes, the IRS proposes payment plans which may be too steep for your financial situation. Rather than just accepting their terms, remember to explore all of your available options.
Take your time, consult a tax attorney, and remember, you can always revisit your arrangement later if your financial circumstances change.
4. Take Action If You Get a Notice
If you receive an IRS notice in the mail, it’s oh so tempting to toss the letter aside and say you’ll deal with the problem later. But it’s essential to respond ASAP; the IRS will only send three or four notices before instituting a lien or levy.
We understand that it takes courage to face tax debt. The sooner you act, the easier the debt is to manage—and the quicker you’ll get the peace of mind you deserve. Once you know how you want to proceed, take the first step toward financial freedom.
5. Hire a Tax Attorney for Better Results
The IRS is relentless when chasing down back taxes. But with an experienced, aggressive tax attorney on your side, you can face the IRS with confidence. You can feel supported, knowing you’re doing everything you can to handle the situation the right way. And you can save a lot of time and money in the long run.
- In one recent case, we brought a client’s tax debt down from $800,000 to only $250 using an Offer in Compromise!
- In another case, we eliminated $200,000 of tax debt using IRS penalty abatement.
- One client eliminated more than $5 million of tax debt through Innocent Spouse Relief.
Not every case will qualify for such extreme results, but you should be aware that you have options to significantly reduce your back tax debt. The sooner you act, the better your chances.
If your debt is $20,000 or more, contact Gordon Law today to discuss your options. The consultation is confidential and completely free!
Have Back Taxes? Let Gordon Law Help Today
Back taxes are extremely stressful, but there’s no need to manage it alone. Instead, let the Gordon Law team stand alongside you. From correcting past returns to negotiating an Offer in Compromise, we’ll help you take control of your tax debt. Complete our form below or give us a call to chat about whether professional back tax filing might help you.
