Back taxes are simply taxes that you owe that you didn’t pay when they were due.
If you’ve underpaid taxes for any reason, the balance that you owe is considered back tax.
If you fail to report taxable income (intentionally or unintentionally, it doesn’t matter) – as the IRS sees it – you still owe them money in the form of a back tax.
Some people don’t have the money when the tax bill comes around, so they just don’t pay. They may plan on paying the money when they’re able…but that time never seems to come around.
If nothing seems to happen or they don’t get ‘caught’, some people start believing that they’ve somehow slipped under the radar of the IRS and that they’re getting away with it. They’re not. In fact it, might take years for the IRS to come after you, but they will eventually.
You will know if your back tax problem is serious if the IRS sends you a Notice and Demand for Payment. At this point, you pay the tax, or you don’t.
If you don’t pay, at least 30 days before the first levy, you’ll be sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing.
If you receive the Final Notice of Intent to Levy and Notice of your right to a hearing, then you know you’ve got big problems. Because that means in 30 days, the IRS will start helping itself to the money in your bank account. If you’ve received a Final Notice of Intent to Levy, you need to take action immediately.
If this happens, there’s absolutely no time to waste. You must get help. There are a number of solutions that can keep the IRS from dipping into your bank account:
* You may have some deductions coming to you that you didn’t claim
* The IRS may have miscalculated your tax
* I may be able to negotiate a legal extension to the process
* The IRS may reduce your debt through an Offer in Compromise
* You Could Set up a monthly installment agreement plan
* You Could Set up a partial installment agreement (where you pay less than the total amount owed)
* You may declare bankruptcy, depending on your situation
Tags: bank levies, oic, paying taxes