Back Taxes Owed
Back taxes are taxes that have been partially or fully unpaid in the year that they were due. Taxpayers can have unpaid back taxes at the federal, state and/or local levels. Back taxes accumulate interest and penalties on a regular basis.
Back taxes refer to taxes owed from a prior year. A taxpayer may be behind in paying taxes for intentional or unintentional reasons. Some of these reasons include – filing a return and failing to pay the tax liability; failing to report all income earned during the tax year, and; neglecting to file a tax return for a given tax year. If taxes remain unpaid after multiple notices have been sent by the Internal Revenue Service (IRS), a minimum penalty fee of $135 will be charged in addition to interest on the unpaid amount, which is 0.5% per month that the tax payer is late, up to 25%. As the total tax debt increases each month due to penalty and interest, over time, it can grow into a significant amount.
Unpaid back taxes can be a serious issue for many taxpayers who don’t have the means to pay them. Depending upon the circumstances, the government may take one of many strategies to deal with back taxes, such as pressing charges, demanding that that the taxpayer pay immediately, or sometimes offering a voluntary disclosure program which helps avoid criminal charges and allows a variety of payment options. Failure to pay taxes can also involve imprisonment.
Since avoidance isn’t an option and the financial effects can be tremendous, it’s in your interest to find a solution as soon as possible, and we’ll be happy to assist you with it.