There are any number of reasons why you might find yourself owing back taxes. Maybe you made a clerical error and didn’t pay enough in previous years, or maybe you simply didn’t have the money to pay them in the past. But once the IRS figures out that you owe them money, it’s in your best interest to take care of it right away. There are several options for taking care of back taxes, but in order to start resolving the issue you must first file all of your past-due returns and then maintain compliance with ongoing payments. Here are the five ways you can go about settling your back taxes:

1.Pay what you owe. This is the simplest and quickest solution to the issue of back taxes, although it isn’t as simple as it sounds. Even if you have the money to pay your back taxes, it can be extremely difficult to get consistent information regarding your account from the IRS. If you’re planning to pay your back taxes in full, consider hiring a tax attorney who can interpret the information you receive from the IRS about the amount you owe. A tax attorney can provide you a breakdown of the amounts you owe for each year and can give you clear instructions about how to pay off the total. A tax attorney will even contact the IRS after the payment has been made to make sure that they have received the payment and processed it.

2. Offer in Compromise. This is a good option for people who are unable to pay their back taxes in full. Based on an individual’s financial situation in the past and the present, and based on a projected future financial situation, the IRS may agree to charge a lower amount than what is actually owed. Again, it is a wise idea to have the help of a tax attorney when pursuing an offer in compromise. A tax attorney can advocate on your behalf to help you pay as little as possible in back taxes.

3. Installment Agreement. This is another option for individuals who can’t pay the full amount of their back taxes. In this scenario, a taxpayer can pay in monthly installments. You may be able to negotiate an installment agreement to address the entirety of your back taxes, or the IRS may only allow you to pay some of your taxes using an installment agreement. This depends on how long the IRS has to collect the debt and how much you owe.

4. Currently Not Collectible. If the IRS agent determines that the IRS will not be able to collect the payment from you by any of the above means, they will determine that your taxes are currently not collectible (CNC). Once your account is deemed CNC, the IRS will cease trying to collect payment from you until your financial situation changes. If it changes for the better, your account will no longer be deemed CNC and the IRS will continue to pursue payment of your back taxes.

5. Bankruptcy. This is typically a last resort for anyone who owes back taxes. If your back taxes are recent and/or are owed to the government or are payroll taxes, you may not be eligible to file bankruptcy. If you are considering filing bankruptcy you should always consult with a tax attorney to determine if you are eligible and to discuss how it will affect your short- and long-term financial plans.

Regardless of your situation, if you find yourself owing back taxes, you should immediately enlist the aid of a tax attorney. A tax attorney will advocate for you and make sure that the IRS honors the plan that is most feasible and beneficial for you. Tax attorneys are also familiar with tax law loopholes that can work to your advantage. So don’t talk to an IRS agent without first speaking to a tax attorney.

Author Bio: Seomul evans is a SEO Services consultant for IRS Audits Dallas and Dallas tax Attorney

Category: Legal
Keywords: legal, dallas, dfw, law, attorneys, lawyers, taxes, IRS, tax, business