What Needs to be Done About Back Taxes?

Someone who has realized that he or she owes money to the Internal revenue service should get in touch with a CPA and evaluate just how much money is owed. An accountant might help a person determine how much money is owed and give someone good guidance on how to deal with future tax returns. As soon as an individual understands how much is owed, they can make a repayment plan.
There is more than you way to back a back tax bill. The Internal revenue service offers free forms for those who owe back taxes and these can be obtained via the Internal revenue service website. If one may pay the bill right away, he or she should do so, since avoiding payment may result in the IRS putting an interest rate on the money owed or demanding a late payment fee. However, not everybody is capable to pay a back tax bill right away, especially if they does not have much money in savings and/or the bill is extremely large.
Someone who cannot file back taxes immediately should write the IRS and ask for either an installment agreement or compromise agreement. If the IRS agrees to an installment agreement, then one might be able to pay back a small part of the money due each month. However, an individual will need to be sure to pay this money back promptly and completely; if one neglects to do so the Internal revenue service will often take drastic actions to get the money it is owed.

A compromise agreement is much more difficult to work out than an installment agreement. In a compromise agreement, the IRS agrees to give up some of the money it is owed and a person only has to pay a portion of his or her back taxes. One should only request for such an agreement if there are no chances of ever being capable to pay back the full sum that is owed. The Internal revenue service will only consider such an option if it is not fully clear how much is owed in back taxes or if the person is facing harsh economic problems.
It is important to pay back any back tax owed quickly. Preferrably, you should pay the whole amount they owes every year. However, people who have made a error with their yearly tax bill may look into the problem without going through serious Internal revenue service action. One should consult with a CPA and pick a back tax settlement method that is financially feasible and satisfying to the IRS.