File Back Taxes

If you are unable to pay your back taxes immediately, you have a few options. The most common option is requesting a payment plan. Once the IRS approves your payment plan, you make payments until your tax debt is paid. Another common option is to apply for an Offer in Compromise (OIC). With an OIC, you are negotiating with the IRS to settle your tax debt for an amount that is less than the full amount of your tax debt. Not everyone is eligible for an OIC. Talk to a tax pro or use the IRS Offer In Compr omise Pre-Qualifier tool to see if you might be eligible.

If you cannot pay any amount towards your tax debt, requesting currently not collectible (CNC) status is an option. If the IRS agrees to place your account into CNC status, then the IRS will not start collection actions until you are out of CNC status. Your financial situation, however, will be reviewed each year to determine whether you still qualify for CNC status. 

Many states offer payment plans, compromise programs, and other options to delay or reduce the amount of back taxes that you may need to pay. It is often best to work with a tax professional to find the right solution for your specific situation.

There is no limit to how far back you can file taxes. To receive a refund, however, you typically need to file within three years after the due date of the tax return. There are some exceptions to the general rule, so if you are past the three year period and are expecting a tax refund, talk to a tax pro. 

Although there is no limit to how far back you can file taxes, you might not need to file all of your unfiled tax returns. Catching up on your tax filings in the most tax efficient manner is complex and depends heavily on the facts for your specific situation. It is usually best to work with a tax pro to make sure that you are filing all your required tax returns and not creating any unnecessary tax bills.

There is no limit to how far the IRS can go back for unfiled taxes. The IRS does not typically enforce the tax filing requirement if the tax return due date is more than six years old. If the IRS does decide to enforce the tax filing requirement for returns that are more than six years old, it is usually because the IRS suspects fraud or illegal activity. 

If you have unpaid taxes, the IRS generally has 10 years from the date of assessment to collect the back taxes. However, there are many exceptions and circumstances that cause the period of collection to be extended. You should know that you can have unpaid taxes even if you did not file a tax return. If you do not file your tax return timely, the IRS can file a return for you. This is called a substitute for return (SFR). If the IRS files an SFR on your behalf, the IRS will typically not include credits, deductions or other favorable items on the return.

If you have not filed a tax return, the IRS may file a tax return on your behalf with the information that they have available. This type of return is called a substitute for return (SFR). In many cases, you will owe more money on a SFR because the IRS does not claim credits, deductions and other favorable tax items on the SFR. 

If you have filed a tax return, or if an SFR has been filed for you by the IRS, then the IRS generally has 10 years to collect the outstanding taxes due. The IRS may take various collection activities, such as liens, levies, and garnishments. The IRS can even cause your passport to be revoked. Additionally, penalties and interest are likely to accrue until the back taxes have been paid in full. 

Each state has different collection policies for unfiled and unpaid taxes. If you have outstanding taxes owed to a state, however, you can expect collections activities such as liens, levies and garnishments to occur at some point.

You may be able to reduce the amount of back taxes that you need to pay by negotiating an Offer in Compromise (OIC) with the IRS. Generally, the IRS will accept an OIC if you offer an amount that is equal to or greater than the amount the IRS expects they could collect from you in a reasonable amount of time. The IRS will consider your ability to pay, income, expenses and assets when deciding if you qualify for an OIC. You can use the IRS Offer In Compromise Pre-Qualifier tool to see if you might be eligible for an OIC.

If some portion of the back taxes that you owe is from penalties, you may be able to have the penalties fully or partially removed by requesting a penalty abatement. You usually need to show that you had reasonable cause for your failure to file or failure to pay timely. A First-Time Penalty Abatement may also be available if you have a good history of filing and paying your taxes timely.

Some states also have an offer in compromise program. A tax professional can assist you with navigating the offer in compromise process.

Yes, most taxpayers qualify for a payment plan with the IRS to pay their back taxes over time. The IRS offers short-term payment plans, which allow you to pay the amount owed within 180 days or less. There is no fee to set up a short-term payment plan with the IRS. A long-term payment plan with the IRS, called an installment agreement, can also be set up. The IRS offers installment agreements up to 72 months. 

Most states also offer payment plans to pay back taxes. The period of time and the application process varies by state. You can contact your state taxing authority or work with a tax pro to set up a payment plan that fits best for your specific situation.