Back Taxes 2
What Are Back Taxes?
Back taxes are taxes owed from a previous year or period. When a person owes taxes, but does not pay them when they are due, the result is back taxes. Likewise, underpaying tax obligations also results in back taxes. A person may underpay taxes or fail to report taxable income intentionally or by accident. Regardless of the reason, however, tax agencies have the right to demand immediate payment and impose significant fines, penalties, and interest as well.
What Will Happen If I Do Not Pay My Back Tax?
If you do not pay your taxes and your return is late, you will be charged penalties for filing your return late, for not paying the full amount that is due by the 15th of April, and interest will be charged on the total amount that is due. If you do not mail out the entire amount due you will recieve a notice from the IRS stating the total amount that you owe them with penalties and interest and requesting that you make payment as soon as possible. If you fail to pay the amount due, you will continue to receive notices, interest will continue to accrue and future tax return refunds will be kept to pay back this money. Eventually, if you allow this money to be left unpaid, the IRS will generally eventually levy your bank account and take whatever money is in there to pay back your debt. You will not recieve notice of this until after the levy has been placed. Generally IRS taxes due are not dischargeable in bankruptcy so that will most likely not be an option for you. Your best option that is available if you are unable to pay the entire amount due would be to set up a payment plan with the IRS.
What If I Can Not Pay My Back Tax?
You have a lot of options when it comes to paying back tax. You can get on a payment plan, you can have them place you in “currently not collectible” status (meaning that they will acknowledge that you currently have a financial hardship), you can try to make a settlement with them (an Offer in Compromise). It really depends on your financial situation.
I Just Received A Notice To Levy
If you’ve had an IRS bank levy filed on your account, you have only 21 days to intercede and stop the levy from taking some or all the funds in your account. We can and will stop IRS bank levies, but in order to do so, we must act quickly.
If you wait too long, the government will place an IRS bank levy upon your accounts, which freezes your accounts and seizes any money in them, up to the amount that you owe. If there is not enough money in your accounts, all money will be removed and your accounts will typically remain frozen until the debt is paid in full.