Back Taxes: What They Are and How to Resolve Them

Everything you need to know about back taxes

What They Are and How to Resolve Them

At a glance:

Back taxes are unpaid taxes from previous years, whether you filed and missed a payment or didn't file at all. Ignoring back taxes can lead to hefty fines and more serious issues.

The IRS offers programs like Fresh Start for taxpayers struggling with back taxes.
Professional tax resolution services can provide expert guidance and representation.
Addressing taxes promptly is crucial to minimizing additional penalties and interest.

What are back taxes?

Back taxes refer to taxes that have been left unpaid from previous tax periods. This can occur when you haven't filed taxes for several years or when you filed but didn't pay the full amount owed. Handling back taxes promptly is essential to minimize additional penalties and interest.

How do you know if you owe them?

You may owe back taxes if:

You've received letters from the IRS or state tax offices.
There were mistakes in your old tax forms.
You had unreported or underreported income from side jobs or gigs.
You filed your taxes but didn't pay the total amount owed.

Understanding Back Taxes

Common reasons for owing back taxes include:

Unexpected life changes
Mismatched income reports
Missed filing deadlines
Errors on previous tax returns
Unreported income from side jobs or gigs

Consequences of Ignoring Back Taxes

Failing to address back taxes can accumulate penalties and interest, wage garnishment, and legal action in extreme cases.

Options for Resolving Back Taxes

1. Federal & State Forgiveness ProgramsAre you eligible?

Open to taxpayers owing no more than $50,000 in combined back taxes, interest, and penalties
Must be current on all federal tax filings
No specific income requirements

2. Installment Agreements

Set up a payment plan to pay your back taxes over time
Options for short-term (120 days or less) and long-term plans

3. Offer in Compromise (OIC)

Settle your tax debt for less than the full amount owed
Eligibility based on your ability to pay, income, expenses, and asset equity

4. Currently Not Collectible Status (CNC)

Temporarily pause collection activities if you can prove financial hardship
Debt continues to accrue penalties and interest

5. Spouse Relief Options

Injured spouse relief: Reclaim money taken from your tax refund to cover your spouse's debts
Innocent spouse relief: Relief from paying additional federal income tax owed by your spouse due to errors on a joint tax return

Find out if you qualify in fewer than 10 minutes.

How to get your tax resolution started?

You're in the right place with Turnout. Get ready for [your call, whether it's with us](contact) or the IRS:1. Gather relevant documents and notices from your state (any state; we're licensed in all 50) or federal tax offices.2. Upload your notice or research your options with a tax pro at Turnout3. Begin the resolution process.*For complex cases, an enrolled agent will advise on your case. Rest assured, our commitment to transparent pricing remains the same.

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The benefits are limitless with Turnout in your corner;

Clear, upfront pricing with no hidden fees
Accuracy with AI precision
Expert guidance from seasoned tax professionals
Time-saving help with complex tax issues
Full strategy exploration of all your relief options
Less stress. We talk with all tax offices for you.

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Preventing Future Tax Problems

To avoid back taxes in the future:1. Regularly track all sources of income, including gig and freelance earnings.2. Understand federal and state tax filing requirements and deadlines.3. Make quarterly estimated tax payments if you have income not subject to withholding.4. Utilize applicable tax deductions and credits to maximize savings.5. Stay informed about tax laws and changes that may affect your situation.

Back Taxes FAQ

1. What if I can't afford to pay my back taxes?The IRS offers various payment options and relief programs for those who can't afford to pay in full.2. How long does the IRS have to collect back taxes?** Generally, the IRS has 10 years from the assessment date to collect back taxes.3. Can I file my past-due tax returns myself?Yes, you can file past-due returns, but professional help may benefit complex situations.4. Will resolving back taxes affect my credit score?No, the IRS doesn't report tax debt to credit bureaus, and since 2018, tax liens no longer appear on your credit report. In short, no tax debt does not directly affect your score unless you pay your debt with a credit card.

FREE! Tax Preparation: Enjoy free tax preparations when you bundle tax relief with your tax resolution service.