Tips to Manage Your IRS Back Tax Professionally

By Paul Burns posted 01-26-2021 03:25 AM


If you get behind on your taxes, things can become complicated quite quickly. However, it is possible to manage your back taxes responsibly. Being proactive is very important and there are steps you can take to reduce the impact of back taxes on your wellbeing and financial health. 

Gather all your tax information, research your IRS account and make sure you file any outstanding returns. A tax professional can help you find out which returns you still need to file and help you deal with your back taxes, especially if you owe a large amount. 

Don’t ignore the problem 

Even if you can’t afford to pay your taxes, you should still file your tax returns on time or apply for an extension. The penalties for not filing are higher than the penalties for non-payment. If you don’t file your return or make payment, penalties can mount up quickly.

If you can’t pay, you will need to get into a payment agreement, of which there are several types. If you don’t establish such a payment plan with the IRS, it will keep attempting to collect your back taxes. 

Individuals with a debt of up to $100 000 can qualify for a streamlined installment agreement. To qualify, there are various conditions, such as having filed all of their tax returns. 

Businesses can apply for an installment agreement if they owe $25,000 or less and have filed all their required returns. The IRS closely scrutinizes business tax returns because it knows that they have more potential for noncompliance. Fortress Tax relief offers tax relief services and will negotiate with the IRS on your behalf whether you’re an individual taxpayer or a business.

Be realistic about the situation

The IRS does not often forgive tax debt. It is possible to apply for an Offer in Compromise (OIC) to settle your tax debt for less than what you owe. However, deals like this are only given to taxpayers who are in real financial hardship. 

Those who have poor prospects for generating future income, high healthcare expenses or have lost jobs may qualify but it does not happen too often. Taxpayers who are making significant income and assets won’t qualify for such relief. 

The Fresh Start Program of 2011 did give the IRS more flexibility in terms of determining whether taxpayers are able to pay their debts. It doubled the tax debt threshold by increasing allowable living expenses and other measures. The IRS had been criticized for not offering enough assistance to taxpayers who were struggling to pay their tax debt but were unable to do so. 

Know when you need help

If you owe less than $10,000, you may be able to handle your back taxes on your own. It is possible to apply for a payment installment plan online and all you need to do is fill out application form 99465. A payment plan typically allows you to pay off your outstanding balance over 36 months. 

If you owe over $10,000, it is in your best interests to get the help of professionals. Payment plans differ and a tax relief service may be able to get you better terms and help to prevent having a tax lien issued against you. 

Such companies can provide significant value if you do some research and use those with plenty of experience handling tax relief cases. You may even qualify for a reduction in penalties or a tax settlement. Tax experts can help you repay as little as possible and prevent or reverse bank levies as well as other consequences of non-payment.