Here at Proctor & Assocs., we know that no one wants to find themselves owing back taxes. However, if you find yourself in this position, we want you to know that it’s not the end of the world. In this article, we’ll provide an overview of three ways you can get rid of your back taxes to help you get a sense of your options, and we are happy to provide more personalized assistance if you give us a call.
- IRS Payment Plan- One way that you can go about dealing with your back taxes is by setting up a payment plan with the IRS. In a short-term payment plan, you’ll be required to pay the outstanding amount within 120 days or less, and you can’t owe more than $100,000 total in taxes, fees, and interest. A long-term payment plan gives you longer to pay your back taxes, but the amount you owe can’t exceed $50,000.
- Offer in Compromise- If you absolutely can’t pay back the total amount you owe in back taxes, you may be able to get the IRS to agree to an offer in compromise, which will let you settle for less than what you owe. However, it’s difficult to get IRS approval for such a plan, so we at Proctor & Assocs. encourage you to both explore your other options and enlist a qualified tax professional if you do decide to pursue this avenue.
- Currently Not Collectible- A third way that you can deal with your back taxes is to request to be put on what’s called “currently not collectible” status. Essentially, this means that the IRS acknowledges that you can’t pay your back taxes at this time, and will delay your collection until you are able to do so. However, we want you to be aware that this status does not make your debt go away– it’s temporary, and the IRS can still file a tax lien against you.
For further assistance with your back taxes, we encourage you to reach out to our team at Proctor & Assocs. to go over your case in person.