Are you feeling overwhelmed by back taxes? Don’t worry—you're not alone. At TaxClosure, we’re here to help you resolve your IRS debt quickly, simply, and stress-free. With our step-by-step guidance, you can tackle your back taxes efficiently and finally enjoy peace of mind. Let's dive into the essential strategies for resolving your IRS debt and discover how TaxClosure can be your ultimate ally in providing back taxes help.
Understanding Back Taxes
Back taxes can be a distressing issue, but they can be managed effectively with the right approach. Here’s a breakdown of the basics so you can gain a clear understanding of what back taxes are and how they impact you.
What Are Back Taxes?
Back taxes refer to any tax liabilities that remain unpaid after their due date. Under these circumstances, it falls into the category of back taxes. Several factors can lead to back taxes, such as underreporting income, errors in tax calculations, or unexpected financial difficulties that prevent timely payment.
Consequences of Unpaid Taxes
Failing to address back taxes can lead to a myriad of consequences that can affect your finances and peace of mind. Here’s what you need to know:
- Penalties and Interest: Unpaid taxes accrue penalties and interest, increasing your debt over time.
- Liens and Levies: The IRS can place liens on your property, levy your bank accounts and all sources of income, and, if necessary, seize your assets to cover your debt.
- Impact on Credit: While unpaid taxes cannot directly damage your credit score, the IRS can still file tax liens against your property. This can hinder your ability to qualify for new loans or credit accounts, as lenders who perform full records checks may view you as a higher risk.
Back Taxes Help: Tax Relief Options
When it comes to resolving back taxes, you have several relief options to consider. Understanding these strategies can help you choose the best path forward to settle your IRS debt. Here’s a closer look at the available tax relief options:
Installment Agreements
An installment agreement is a payment plan that allows you to pay your tax debt over time in monthly installments. This option is helpful if you can’t pay your entire tax bill upfront but want to avoid the consequences of non-payment.
- How It Works: You propose a monthly payment amount to the IRS based on your ability to pay. Once approved, you make regular payments until your debt is fully settled.
- Benefits: Installment agreements prevent the IRS from taking more drastic collection actions, like liens or levies, as long as you stay current on your payments.
- Eligibility: Most taxpayers can qualify for a monthly amount, but interestingly enough, many can qualify for a government-authorized zero-pay plan (see Currently Not Collectible).
Currently Not Collectible Status
If you’re experiencing serious financial hardship, many people qualify for a Currently Not Collectible (CNC) status. This status means the IRS acknowledges that you cannot afford to pay your tax debt.
- How It Works: You provide the IRS with detailed financial information showing that paying your tax debt would prevent you from covering ordinary and necessary living expenses. If approved, the IRS halts its collection activities.
- Benefits: While in CNC status, you’re not required to make any payments, and all collection efforts, such as bank or income levies, are eliminated.
- Eligibility: CNC status is usually granted to those whose financial situation is such that at the end of every month, there is no money to pay anybody for anything. Better said another way, these taxpayers live in a state of breaking even at the end of every month. There are no surplus funds.
Common Pitfalls in Resolving IRS Debt
Navigating IRS debt can be tricky, and it's easy to make mistakes that might complicate or delay your resolution. Understanding these common pitfalls can help you avoid unnecessary stress and ensure a smoother path to resolving your tax issues. Here’s what you need to watch out for:
- Ignoring IRS notices
- Putting off dealing with your tax debt
- Choosing the wrong IRS debt relief option
- Falling for tax scams
By staying informed and performing just a minimal amount of due diligence, you can effectively resolve your tax obligations and achieve a workable and successful outcome.
How TaxClosure Can Help
At TaxClosure, we understand that life happens. Missing a tax payment doesn't make you a bad taxpayer—it just means you might need help getting back on track. Our 24/7 internet platform simplifies the process, helping you address these back taxes without the stress. Imagine knowing exactly what to do next; it doesn’t get easier than completing a single form, printing, calling the IRS, and you’re done. It’s over!
Want to see how it works step-by-step? Watch our video series - Here
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Step-by-step guidance ensures that you understand every step of the journey. We make it our mission to offer clarity and ease of use, turning an overwhelming task into a straightforward process, sometimes in as little as 90 minutes. With TaxClosure, helping you resolve your IRS debt is not just possible—thousands have benefited. So, why wait? Let us help you achieve your resolution solution today.
Do you have any questions concerning back taxes help? If so, please call (888) 891-3790 and speak with one of our representatives. Or, if you are ready to get going now, click here.
Sources
Taxpayer Advocate Service - Underreported Income
U.S. Department of Labor - Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title III (CCPA)