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If you find yourself owing back taxes, the path to resolution depends on the amount owed and the number of years missed. It’s crucial to assess your financial situation and explore available options sooner rather than later. Proactive communication with the IRS is key, as waiting for them to collect what’s owed can lead to complications.
Every year, over 100 million Americans file their income taxes, but an estimated 11.23 million individuals find themselves owing overdue taxes, totaling more than $125 billion. Navigating tax filings can be stressful, especially for those uncertain about the correct forms, payments, and potential refunds. Self-employed or independent contractors, responsible for their tax payments, need to ensure they’ve paid enough throughout the year.
For those behind on taxes, relief programs offer solutions. Whether you’ve forgotten to file for several years or unsure about your outstanding balance, the IRS website provides a tool to verify payments made in the last two years. Programs available for application include:
Offers in Compromise: Settle back taxes for less than the total amount.
Currently Not Collectible Status: A temporary hold on collections.
Applying for these programs independently or with the assistance of a tax relief company is an option. While these programs prevent IRS legal actions, it’s essential to be aware of deadlines and potential service fees charged by relief companies.
The most common method to repay back taxes is through long or short-term payment plans. Short-term plans require payment in 120 days, while long-term plans extend beyond that. Eligibility criteria include the total balance being less than $50,000 for long-term plans and up to $100,000 for short-term plans. Interest continues to accrue until the balance reaches zero.
This option allows settling back taxes for less than the owed amount, but it’s rarely accepted. Eligibility depends on the filer’s ability to pay, income, assets, and regular expenses. The application process involves a filing fee, a non-refundable down payment, and being current on all tax returns. The IRS can place a tax lien during the settlement process.
Navigating these processes can be complex, and seeking guidance from a Las Vegas IRS tax debt attorney can provide valuable assistance, especially when appealing IRS decisions.
Embark on the journey to financial freedom by understanding your options and taking the necessary steps to resolve back taxes.
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