Back Taxes Help: Get Help Filing IRS Back TaxesFacing the reality of back taxes can be a daunting experience, but it’s never too late to resolve back taxes with the following steps:
- File your taxes
- Pick a payment plan
- Follow Payment Plan Accordingly
- How to Deal With IRS Back Taxes
- Consequences of Not Filing Back Taxes
- How Many Years Later Can You File Back Taxes?
- Advantages to Filing Back Taxes
How to Deal With IRS Back TaxesThe IRS offers various payment plans that can help taxpayers who may not be able to pay the full amount they owe in back taxes. Despite what you can or can’t pay, it’s important to issue an immediate response to the IRS indicating your situation.
File Your Taxes
Pick a Payment Plan
Installment AgreementThis is a monthly payment plan that allows you to pay a rate to the government over an extended period of time, usually anywhere from 4-6 years. If you owe $50,000 or less, you can apply for an online payment agreement. If not, then you’ll have to make the request by filing Form 9465 and then proceed with a Collection Information Statement as well: Form 433-A, Form 433-B, or Form 433-F.
Offer in CompromiseThis is a settlement offer that you and your tax professional make to the IRS which amounts to less than the debt owed. This is how it works: you pay the agreed-upon amount and the IRS will then forgive the remaining balance. This type of payment alternative can be tricky because the taxpayer has to meet a specific criterion that proves they’re eligible. For instance, if the taxpayer is eligible for an installment agreement then they will not be eligible for an offer in compromise. This sort of payment plan is specifically for those experiencing extraordinary hardship. However, if the taxpayer, usually assisted by a tax professional, can declare and prove that they’re eligible, then the offer in compromise can be incredibly beneficial.
Applying for an offer in compromise
- To apply for an offer in compromise, follow these steps:
- Complete IRS Form 656 and 433-A
- Include relevant documentation: paystubs, investment statements, bank statements, and other financial documents listed on each of the forms mentioned above. Be sure these are copies, not originals.
- Include the $205 fee with your application (low earners may request a waiver). The IRS accepts personal checks.
- Mail your application, documents, and fee to the IRS. The appropriate address can be found in this IRS handbook.
Currently Not CollectibleThis option is not a payment plan, but more of a diversion of the immediate amount due. In this case, the IRS labels your account ‘not collectible’ and will then wait for your financial situation to improve. Here are a few things to keep in mind if you do apply for this option:
- Be sure to file Form 433-F to apply for this status.
- By no means does this reduce the amount of the tax debt owed — and in most cases, your debt will accrue interest while the status is in effect.
- The IRS will continue to check in to see whether your finances have improved enough to begin repayment on your debt.