Many taxpayers failed to file their tax returns this year. Yet, they may know that after the filing deadline, the IRS will begin to charge interest and penalties on any tax amount that remains to be paid. Therefore, back taxes resolution must be achieved as early as possible.
Taxpayers who didn’t apply for an extension or haven’t paid any amount to the IRS in taxes this year will need to choose a tax debt resolution plan to pay their back taxes. Those taxpayers who filed their tax returns, but paid only a partial amount can either pay the remaining amount in a single payment or payments with an Installment Agreement.
Taxpayers who cannot pay their full tax liability may be able to have their tax amount reduced under a debt resolution plan, such as Offer in Compromise. However, before applying for a debt resolution plan, it is advisable to consult a tax professional or a tax service. Tax laws and IRS policies are complicated, and it is important for taxpayers to understand their case before contacting the IRS.
Even though every debt resolution plan has qualifying factors, a taxpayer’s unique circumstances are always considered by the IRS. For example, the failure-to-file penalty can be reduced or forgiven if a taxpayer could not file tax return until the deadline due to reasonable causes. Reasonable causes include natural disasters, serious illness, death in the family, and divorce.
Tax debt resolution should be sought early to avoid interest and penalties, and possible IRS’ collection actions.