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If the IRS determines that you have underpaid or failed to file back tax returns, you might be liable for penalties and interest in addition to the tax the IRS claims is owing. Interest is charged not just on back taxes, but also on the penalties levied against you. Penalties and interest are a huge part of the cumulative liability when you owe the IRS back taxes.
Back Tax Returns: When the IRS Pursues You
Your first step is to fill out and file the tax forms for the year(s) the IRS claims you did not pay, or underpaid your taxes. If you filed but didn’t pay, or you miscalculated what you owed, now is a good time to consult a reputable income tax professional to review your back tax returns and your W-2's and 1099's. If you voluntarily file your back tax returns as soon as you are notified of the IRS's claim, you will help eliminate the likelihood of your being subject to criminal charges.
Request your tax transcript from the IRS to be certain that all income reported on your W-2’s and 1099’s was included on the back tax returns for the year in question. Don’t panic. If you do owe back taxes and are not in a financial position to pay in full, the IRS may agree to set you up on a repayment plan. If your financial circumstances make you unable pay anything at present, and you have filed your back tax returns for the year owing, you may be still able to get the IRS to put a temporary hold on their collection actions until your financial situation improves.
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Back Tax Returns: When the IRS Pursues You
Your first step is to fill out and file the tax forms for the year(s) the IRS claims you did not pay, or underpaid your taxes. If you filed but didn’t pay, or you miscalculated what you owed, now is a good time to consult a reputable income tax professional to review your back tax returns and your W-2's and 1099's. If you voluntarily file your back tax returns as soon as you are notified of the IRS's claim, you will help eliminate the likelihood of your being subject to criminal charges.
Request your tax transcript from the IRS to be certain that all income reported on your W-2’s and 1099’s was included on the back tax returns for the year in question. Don’t panic. If you do owe back taxes and are not in a financial position to pay in full, the IRS may agree to set you up on a repayment plan. If your financial circumstances make you unable pay anything at present, and you have filed your back tax returns for the year owing, you may be still able to get the IRS to put a temporary hold on their collection actions until your financial situation improves.
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