Back Tax Relief: How To Get Rid Of Them

Dec 14, 2023 By Triston Martin

Back taxes are those that are owed but have not yet been paid and usually pertain to a prior tax year. And if you're concerned about paying your taxes, you're not alone.

You may qualify for tax relief by taking advantage of one of four common strategies outlined below; we also provide information on filing back taxes and the number of years they may be submitted.

Payment Arrangements With The Internal Revenue Service

The IRS will likely approve a payment plan if you need additional time to pay your tax bill. If you owe taxes and still need to pay them, you can set up a payment plan to pay them off over time.

  • The Internal Revenue Service (IRS) provides short- and long-term payment plans.
  • Consider the following information regarding tax relief through an
  • Arrangements for Remitting Taxes to the Internal Revenue Service:
  • Interest and late fees still apply, even if you set up a payment plan. Those will keep adding up until your account balance reaches zero.
  • Payments on debts over $25,000 must be made through preauthorized debits from a bank account.
  • There is a processing fee for debit or credit card payments. Credit card fees are roughly 2% of the payment amount, while debit card fees range from $2 to $4.
  • In most cases, applicants are considered "low-income" if their adjusted gross income is less than 250% of the federal poverty limit. The IRS Form 13844 will tell you if you are eligible.

Make A Peace Offering.

An "offer in compromise" may help you settle your tax debt. You can use this to negotiate a reduced amount to pay off your back taxes with the IRS. If you're in dire straits financially and can't pay your tax bill, or if doing so would cause undue hardship, you may qualify for an installment agreement with the Internal Revenue Service

However, getting the IRS to approve an offer in compromise is significantly more difficult than getting approval for a payment plan. The IRS grants fifty percent or less of requests. Before making a compromise offer, you should consider your alternative options.

Requesting A Compromise Offer

  • You can submit an offer in compromise using IRS Form 656-B, which contains all the necessary information and procedures. Some information is provided below.
  • You'll need to pay $205, which won't be refunded. Those with low incomes can apply for a reduction. A one-time, non-refundable fee must be paid upfront.
  • You must file your tax returns on time. You might not be eligible if it has been a while since you filed a tax return.
  • Until the IRS accepts your offer and you've made good on your bargain, it can file or maintain tax liens.

Non-Collectible As Of Right Now

The Internal Revenue Service (IRS) allows taxpayers to request "currently-not-collectible" status if they cannot pay their taxes and basic living expenses. A request for a collection moratorium must be filed with the IRS, and you may be required to submit financial documentation in the form of a Collection Information Statement or a Collection Information Statement for Wage Earners and Self-Employed Individuals to back up your claim that you are in dire financial straits. You'll be asked to detail your monthly earnings and outgoings on that form.

A few things should be kept in mind regarding this tax break:

  • This relief is only temporary; the IRS may reevaluate your income once a year to see if your circumstances have improved.
  • Your tax debt will still be there even if you're considered "currently not collectible."
  • An IRS tax lien is still possible.
  • Employing a tax relief firm

Companies specializing in tax relief often provide financial aid to taxpayers in a bind. You can utilize some of them if you need help with the procedure or completing forms. The tax relief firm may need you to pay an up-front fee equal to a certain percentage of your tax debt.

The FTC Cautions Its Readers To Exercise Caution:

Unfortunately, most taxpayers do not meet the requirements for the schemes these scammers promote, and the businesses they represent are all scams.

Gather Your Tax Documents:

There are five different sorts of tax transcripts that you can request for free from the Internal Revenue Service.

Check Your Eligibility For A Compromise Offer:

To determine whether or not an offer in compromise is right for you, you can utilize the IRS's online pre-qualifier tool. Remember that this is only the first step; you will still need to submit a formal application after using this tool.

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