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Back Taxes: Settle Tax Debt and IRS Problems

There are various ways that you can settle debt if you owe IRS back taxes. Even though the simple thought of owing back debt to the IRS is unnerving, the agency recognizes that some extenuating circumstances may prevent taxpayers from paying in full. Whether you owe less than $25,000 or more than $100,000, a tax specialist can help you negotiate a favorable settlement for paying the debt.


Strategies for Resolving IRS Back taxes

Strategies for resolving IRS debt problems are usually based on the amount you owe, and your current income and expenses. For instance, you might owe just under $10,000 in back taxes and have filed all tax returns to-date. If so, the IRS may accept a payment arrangement to pay the debt within 36 months.

Another example is if you have more than $20,000 in IRS debt. Because of this larger amount, you might want to seek guidance from a tax specialist who is experienced in handling IRS tax issues. Working with a knowledgeable expert may increase your odds of being approved for a settlement agreement. Additional help from a tax specialist includes removing bank levies, wage garnishments and settling the debt for less than the total amount.

A tax specialist will work with you to devise the best strategy based on your individual circumstances. The result could be one of the following resolutions to your tax debt problems.


Offer in Compromise

Generally, an Offer in Compromise is a program provided by the IRS to help taxpayers who cannot pay the full amount of back taxes. When the total tax bill exceeds more than you can afford to pay, you can file paperwork and agree to pay a smaller amount to satisfy the debt. Assistance from a tax specialist increases your chances of qualifying for an OIC.


Payment Plans and Installment Agreements

Negotiating a reasonable monthly payment plan for IRS back taxes is another viable option. Typically, the agency will accept a payment plan – or installment agreement – that also puts an end to any collection efforts such as wage garnishments or bank levies. With a payment plan, you agree to pay off the back taxes over a period of time that is acceptable to the IRS. Continued acceptance of this arrangement depends on your ability to remain current with the monthly payments.


IRS Debt from Delinquent Tax Returns

Filing delinquent returns is essential to the IRS agreeing to accept either an OIC or installment agreement. Filing late does not forfeit your right to file an original return. Once all of your delinquent tax returns are filed, your tax specialist will begin negotiations to pay your back taxes.


Statute of Limitations on Collection of IRS Back Taxes

Most taxpayers are unaware that there is an expiration date on back taxes. By law, the IRS cannot continue to collect back taxes after 10 years from the assessment date. In general, the clock begins on this date close to the annual filing date for that year or when the audit begins.

For some cases, doing nothing is the best strategy when the expiration date is close. In other cases, this strategy could work against your financial goals. Seeking guidance form a tax specialist can help you determine if your IRS debt can be resolved by an expiration on the statute of limitations.


Discharging IRS Debt and Back Taxes with Bankruptcy Filing

Bankruptcy is considered a last resort to solving problems with IRS back taxes. Generally, a tax specialist might advise you to file bankruptcy when another strategy such as an OIC is rejected. There is a process to follow before being eligible to declare bankruptcy as a resolution to IRS debt.


Settling Tax Debt from Offshore Bank Accounts

If the IRS back taxes you owe are for funds in an offshore bank account, a proactive stance could minimize the level of penalties you face. Disclosing the exact amount not only offers a possible pathway to satisfy the debt, but you may also avoid criminal prosecution for tax evasion. A tax specialist will work with you to determine how much you owe in taxes and the best strategy going forward.


Tax Relief Under the Innocent Spouse Program

You might qualify for the innocent spouse program if the IRS debt you face belongs to your spouse. Proof is required to show that you are not responsible for the IRS back taxes that your spouse owes.


Being a Victim of Investment Fraud

A tax specialist will also help you resolve IRS debt if the amount owed is from phantom profits because you were a victim of a fraudulent investment scheme. In some cases, you could recoup between 30 and 40 percent of the losses you incurred.


Payroll Taxes

Owing back taxes from employment and payroll taxes that are delinquent requires swift action to protect your business. Typically, the IRS places a higher priority on efforts to collect employment taxes than individual taxes. Your business can also benefit from the guidance of a tax specialist who is an expert at resolving payroll and other employment tax problems.


Freedom of Information Act

By law, you have a right to review your IRS files to understand past due taxes were assessed by the agency.


Hire a Tax Specialist to Settle IRS Tax Debt

You also have a right to represent yourself when facing problems with IRS back taxes. However, the intimidating, frustrating and time-consuming process can seem overwhelming to a novice. Hire a tax specialist to receive solid representation from an experienced professional.

End Your Tax Debt:
  • National Tax Relief serves taxpayers ­ in all 50 states – with offices strategically located near IRS Offices.
  • You can retain National Tax Relief to begin solving your back tax problems today!
  • National Tax Relief resolves back taxes for corporations, partnerships, payroll and more.