Get Free Quote
When you are unable or cannot pay back taxes owed
Unpaid Back Taxes – What You Should Do and Expect
Common Facts on Unpaid Taxes
According to one study, in any given year more than nineteen percent of the American population has back taxes that have been left unpaid. It is actually a very common occurrence within the IRS. Because of the frequency of unpaid back taxes, the IRS has set up many solutions to assist individuals with getting them paid to avoid future problematic occurrences. The quicker you decide to take care of this problem the more helpful the IRS will be in settling them. Usually, the IRS collects the largest sum of taxes you own with minimum effort. This is especially beneficial to remember if you want to find a back tax settlement that is a reduced version of the actual amount. The process the IRS has installed is an automated way to get individuals to pay their taxes. This article will describe the events that will occur if you choose to not resolve your back taxes with an IRS agent.
When you are unable to pay owed unpaid taxes
Unfortunately, even if you are not in possession of sufficient funds to reimburse the IRS, they still expect something from you. The IRS provides different methods of repayment if you are unable to afford lump sum amount. Individuals can either pay monthly payments to put toward the full amount, or the IRS will let you pay only a portion of the total amount and leave it at that. Different methods are available that respond to your individual financial situation. As long as you are honest with the IRS about not having the capability to compensate, the IRS will discover a way to assist you.
Steps involved with paying owed back taxes
The IRS provides numerous opportunities to repay owed back taxes. Some methods require full payment while others allow you to pay on a small portion of the total amount owed in back taxes. There are many simple steps you can follow to pay taxes indebted.
IRS actions for unpaid taxes
Obtain assessment letter and CP notices (computer paragraph notices, also known as 500 series notices)
You are entered into an automated computerized notice cycle ones the IRS establishes that you currently owe them a certain amount in back taxes. A letter is sent to your home that officially states how much is owed, which will include any interest and penalties you have incurred during your period of nonpayment. A series of four CP notices follow the initial letter. Each CP letter contains automated messages that anyone will receive if they owe the IRS back taxes. The letters go from CP-501 to CP-504. As the letters move from 501 to 504, the message becomes more demanding, more threatening, and states clearly their intention to tax. (more…)
Get Notice of Federal Tax Lien (NFTL, IRS Form 668)
When you receive a notice of federal tax lien from the IRS, it means they have gone ahead with encumbering your personal property. This notice inhibits you from borrowing money or selling property against any major assets you currently own (more…)
Receive a tax levy
Once a tax levy has been put on your property, the IRS is able to confiscate your assets. This includes just about any assets aside from a small number of exceptions. Until your entire tax liability is totally paid off or another agreement has been arranged, the IRS continues to seize various assets from you. A levy is also known by a variety of other names. Different names include:
- Wage Garnishment – A levy placed on any wages you receive.
- Bank Account Levy – A levy placed on your personal bank account.
- Property Seizure – Complete seizure of all your physical assets.
Outlined above is the usual route the IRS will take against you when trying to get you to pay unpaid back taxes. If you take quick enough action, you will not have to pay as much money to the IRS. For more solutions on how to deal with back taxes that remain unpaid, see the right-hand column.