Posted by Elliot Kravitz, ATP

Five Practical Tips for Dealing With Back Taxes

Five Practical Tips for Dealing With Back Taxes

Taxes that you did not pay for years are called back taxes. These taxes are due for at least a year and come with interest and penalties until paid. Many people owe back taxes and could be confused about what to do.

When it comes to collecting back taxes, the IRS has high power. However, there are rights that taxpayers have as well. Hence, for any taxpayer who owes back taxes, there are some things they need to know when handling the IRS.

Mind you, ignoring the problem will not make it go away. It will even lead to other severe issues like wage garnishments, tax liens, and bank levies.

Here are the practical tips with which you can take care of back taxes that you owe:

  1. Talk to a Tax Relief Professional

Whatever issue you have with the IRS, you are entitled to tax representation. Handling tax issues yourself is a bad idea. Tax laws are not easy to understand; hence you might complicate matters for yourself. By law, you can request the IRS to pause any collection activity till you get tax representation. Bear in mind that stalling will not help as well.

  1. Know Your Options

Do not yield to the IRS's mind game of making you think your only alternative is to pay the entire back taxes in full. IRS agents could be firm and threatening; hence, be sure never to lose your calm and understand your options.

As discussed above, do not let the IRS make you think you have no option. As a taxpayer, you have rights, and here are some of the options available:

  • Have a monthly payment plan set up with the IRS

  • Penalties and interest can be removed or reduced.

  • Pay the entire amount within two to three months. This is the best thing you can do, although not everyone can.

  • File for bankruptcy to get rid of the back taxes liability

  • Pay off back taxes with a line of credit. You can deal with credit agencies easily compared to the IRS.


  1. File Your Missing Tax Asap

You need to officially file all tax returns with the IRS before you can take care of back taxes. Filing a tax return is not hinged on your ability to pay the liability. If you do not file a past due return, you will get the highest fine the IRS can ever impose as a penalty.

As a result, filing a missing return will save you a lot of money in the long run compared to staying put. This will trigger more penalties and interest later.

You are also better off filing your current tax return on time. You need to file your tax return on time before the IRS can get into a payment agreement. Besides, this will make you owe a lot of money alongside interest and penalties in the future.

  1. Make Your Back Taxes a Priority

The IRS is more robust and persistent in getting money from citizens. Compared to other credit agencies, you are more protected than with the Internal Revenue Service. As a result, if you have a lot of debts like medical bills, credit card bills, and other obligations, paying your back taxes should be a priority. Not doing so comes with grave consequences and could trigger wage garnishments, bank levies, and tax liens.

  1. Avoid Falsifying Information

You are at a significant disadvantage if you try to outsmart the IRS with false information or lies. The FG has given the IRS agents immense power and authority. Hence crimes like withholding information, falsifying data, and lying could trigger additional punishment like imprisonment, fines, and penalties.

Besides, this is a federal criminal offense. And also, having a simple revenue collection escalate into a federal criminal case is not worth the trouble.

While we do not recommend withholding information, the IRS cannot request some information from you. According to the law, you are entitled to keep somethings private. This is where the services of an expert tax professional come in. The same way withholding information can get you into trouble, divulging too much information also might not help your case.

With this in mind, be sure you seek professional advice before contacting the IRS on issues concerning back taxes.


Elliot Kravitz, ATP
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