Important Things to Consider When Settling Your Back Taxes

Many Americans fear crossing the IRS—and for a good reason. Unpaid taxes, late payments, and other crucial mistakes can very much pile up, causing the institution to take appropriate action. Even big-time hard hitters like Al Capone stood no chance when it came down to his tax evasion charges, so is it any wonder why people are terrified of committing any form of error that involves their federal obligation?

There are times when you may find yourself in such situations, such as being late in paying your taxes. Late payments will usually land you a penalty or two, or worst, tarnish your bank levies. In such a case, there are specific measures for you to take to prevent the situation from escalating.

While these considerations are all manageable on your own, you may still want to consult a tax expert to be sure with the next few steps you are about to make:

  • Communicate the Situation with the IRS

If you are sincere about paying your taxes, let the IRS know. Explain the whole situation and never attempt to ignore their calls or messages. The thing about the IRS is that they are often feared due to their collection process and strict implementation of the law. However, they’re also there to offer you a compromise when it comes to paying your back taxes. 

Communicating also informs them of your commitment to pay the amount, which should be a good enough reason for them not to seize your assets or implement further penalties on you.

  • Request for a Penalty Waiver

In relation to the first pointer, you may opt to request a penalty waiver. If you aren’t familiar with this type of document, remember that it’s essentially a form that enables you to avoid paying the penalties and interest incurred due to the late payment. 

Simply put, you will just be entitled to pay the back tax and not the add-ons that may have been applied to it. Getting one can be challenging, however, so make sure to consult with a tax expert regarding your qualifications for a penalty waiver.

  • Get a Total Rundown of How Much You Owe the IRS

Being late in paying your taxes is one thing, but paying the wrong amount is a more serious matter. This is equivalent to paying on time but with only half the amount, which is deemed against the rules. You wouldn’t want to pay way less than what you really owe the IRS, as they will further question you about your intentions and commitment to paying federal obligations.

  • Consult a Tax Specialist

Sometimes, you can’t just do it all. Consult a tax specialist to analyze the next few steps you can take to resolve the issue properly. Tackling the problem alone may prove to be difficult, especially since there may be computations and summaries of amounts that may be too complicated to decipher.

Conclusion

Settling your back taxes can be difficult, especially if you’re not familiar with the practices. Apart from the possibility of paying the wrong amount, you may also end up paying late penalties and fines. For these reasons, consulting a tax professional is highly recommended. You’ll save you a lot of time, money, and effort in the long run.

If you are looking for a tax resolution specialist in Birmingham, AL to help you with back taxes, look no further than the Axiom Tax Resolution Group! We offer you a group of skilled tax professionals dedicated to helping individuals and businesses break free from IRS tax problems. Contact us to learn more!