What to do if you owe IRS back taxes? Tax law is a funny thing. For most people, all they know is that they have to settle up their taxes with Uncle Sam every April 15. But when they owe money to the IRS, they don’t know that the IRS will always contact you with a letter first, that there are many different ways to handle a tax problem, or that there are time limits on IRS collections. When you owe the IRS and want to deal with them, it is important to know how the IRS operates, the common mistakes people make when trying to resolve their tax debt and how you can avoid making the same mistakes again. So, here are the things you can expect from the IRS when you owe back taxes. So you owe IRS money? The IRS begins sending series of notices when you owe back taxes and file your returns. The tone of preliminary IRS notices is usually neutral - informing taxpayers …show more content…
And the IRS feed on desperation, as taxpayers will agree for any kind of unrealistic repayment plan to get their levied money back. Only later on, they realize the mistake of accepting their one-sided plan as it leaves the taxpayer with little or no disposable income. The right way to deal with back taxes Do whatever is necessary to fix the underlying cause of your debt first. Make sure you have set enough aside a portion of your revenue for taxes or for estimated tax payments and checking your withholdings are correct is well worth your time. Make sure the person you hire for representation can understand and fix the root cause of your problem so that it never happens again. Never ignore a notice from the IRS. It’s probably fair to assume that no one wants to receive IRS letters in their mailbox (except when it is a refund check). But ignoring the letter does not make it go away! Get a friend to open it if you can’t and find out what the letter says. It is best to resolve the matter immediately, before the IRS engages more drastic