Back Taxes
Back taxes are unpaid taxes from previous years.You may owe them if you didn’t file, underreported incme, or didn’t pay in full.
What Happens When You Don’t Pay Your Taxes?
Unpaid taxes don’t just disappear they grow. The longer you wait, the worse it gets. The IRS and tax authorities add interest and penalties that quickly snowball into serious debt.
Penalties You Should Know
🔸 Failure to File Penalty
If you don’t file your tax return on time, the IRS charges 5% of the unpaid tax per month, up to a maximum of 25%.
🔸 Failure to Pay Penalty
If you file but don’t pay the full amount, you’ll be charged 0.5% per month on the unpaid balance. This may also increase if you continue to ignore your tax debt.
🔸 What This Means
Even a small amount of unpaid taxes can turn into a large debt if left unresolved. Penalties stack up fast and the IRS has the legal power to take action, including:
🔸 Wage garnishment - taking money directly from your paycheck
🔸 Bank account levies - freezing and seizing funds
🔸 Liens on your property - affecting your ability to sell or refinance
🔸 Damage to your credit and financial reputation
How to Resolve Back Taxes
✅ Set Up a Payment Plan
Pay off your balance in monthly installments you can afford.
✅ Request a Short Term Extension
Need just a little more time? You can apply for a brief grace period to settle your balance.
✅ Apply for Hardship Relief (Currently Not Collectible)
If you’re unable to pay due to financial hardship, you may qualify to pause collection activity temporarily.
✅ Negotiate an Offer in Compromise (OIC)
In some cases, you can settle your debt for less than what you owe.
✅ Work With a Tax Professional
Tax pros understand IRS procedures and can negotiate on your behalf, ensuring you get the best possible resolution.
Need Help?
Book a free consultation and let our tax professionals handle it for you. Don’t wait get back on track today!
Things You Might Be Wondering
Here, we’ve gathered some of the most common concerns, curiosities, and need to knows to help you get quick answers without the wait.
The time it takes to complete your tax return depends on the complexity of your situation.
For most individual returns, it typically takes 2–5 business days once all required documents are received.
If you haven’t filed taxes for multiple years, it’s important to act quickly to avoid penalties or enforcement actions from the IRS.
We can help you gather your documents, file back tax returns, and explore options available for you
The best structure depends on your goals, liability concerns, and tax situation. LLCs offer flexibility, S-Corps can reduce self employment tax, and C-Corps provide strong asset protection and are ideal for companies planning to scale.
We’ll evaluate your situation and guide you toward the right choice.
Yes, you can file after the deadline, but you may face penalties and interest if you owe. If you’re due a refund, there’s typically no penalty.
We recommend filing as soon as possible to minimize any potential consequences.
IRS notices can range from simple requests for information to audit or collection notices.
Don’t panic contact us immediately so we can review the notice and respond correctly on your behalf.
Legal tax reduction strategies include maximizing deductions, using business expenses, contributing to retirement accounts, and choosing the right entity type.
We’ll help you build a custom tax strategy tailored to your income and business model.
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