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Owe Back Taxes

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					Owe Back Taxes
First of all, if you owe back taxes, don't be embarrassed. Millions of
people are in the same situation as yours. This is especially true for
individuals who are 1099'd. No taxes are withheld, which at the time is
great because you have more money to yourself. And you think, "By this
time next year, I'll have the money saved up." But unfortunately that is
usually not the way it turns out. Instead, saving your money becomes very
difficult. Things happen in life that just seem to get in the way of your
plan to save up money for your taxes. That's life. There's nothing you
can do about that now. Instead focus on the present time. You owe back
taxes, so what are you going to do about it?
If you owe less than $10,000 the IRS will put you on a payment plan. If
you can afford that, then great! But if you can't afford that
arrangement, or if you owe more than $10,000, then you may have to look
at alternative methods of resolving this situation. If it comes down to
negotiating a settlement, then it's important that you know this: The IRS
will not negotiate a settlement until all of your taxes have been filed.
So for example, if you have not filed for the years 2005, 2006, and 2007,
you'll need to have your taxes prepared. A reputable tax representation
firm will prepare your taxes on your behalf if you decide to go that
route. If your returns are simple and you have done them before, then you
may be able to do these on your own. Frankly however, you may want to put
some serious thought into that. Taxes can be very complicated.
If you owe back taxes and simply cannot afford to pay your back taxes in
full or via an installment agreement, you may qualify for a Currently Not
Collectible Status. This is basically where your overall situation and
your current financial situation prove that you just can't afford to pay
on that for now. Often times the IRS will freeze their collection efforts
for up to two years in order to give you time to work this out. Other
plans include debt reduction plans such as an Offer In Compromise. This
is a program that allows you to pay less than what you owe. Keep in mind
that this can be a lengthy procedure.
An interesting point is that sometimes a large percentage of your back
taxes are made up of interest and penalty. Under certain circumstances,
you may qualify to have your penalties abated. You can request your tax
records from the IRS to determine exactly how much you have been charged
in penalties. Be forewarned that there is a lot of red tape with the IRS
since they are the country's largest collections bureau. You may want to
consider consulting with an IRS Resolution Firm to settle your back taxes
if you don't have the time necessary to devote to the situation, or
knowledge required to prepare your documents and file any necessary
urgent actions such as stopping or preventing a garnishment or levy.
There is much help with back taxes available but first you need to decide
to take action.
Nigel Galt is a partner in Atlas Tax Solutions, the premiere tax
resolution firm. With expert CPA's, Attorneys and Enrolled Agents on
staff, we assist with wide ranging needs, from tax preparation, to
submitting offers in compromise. If you owe more than $10,000 in back
taxes, or are currently having your wages garnished or have received a
lien, then apply online at http://www.backtaxdefense.com for immediate
assistance.


				
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posted:10/19/2010
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