How to Get IRS Tax Relief from Back Taxes or Unfiled Tax Returns

With the IRS enforcement budget reaching a record $5.5 billion, more Americans than ever will need to know their options for income tax relief and IRS help to resolve IRS problems and avoid financially debilitating penalties and levies. If you owe back taxes or have several years of unfiled tax returns, here are a few tips to help you get the IRS tax relief you need.

You can run, but you can’t hide from the IRS. In 2008, the IRS collected $56.4 billion, $7.7 billion more than in 2006. And Congress has sent another $12.2 billion to the IRS this year resulting in a record $5.5 billion budget and hundreds of new IRS agents who have been hired to crack down on back taxes and delinquent tax returns. With the record federal deficit, Americans can expect more tax audits and increasingly aggressive collection tactics by the IRS.  But the good news is the sooner you take care of your delinquent taxes, the less penalties and interest you’ll owe.

If you have unfiled tax returns or owe IRS back taxes, it’s important to figure out what the best IRS tax relief option is for your particular situation. It is also important to understand the process for resolving your IRS tax debt so you have realistic expectations and know which tax resolution strategies you can benefit from.

Tax relief from back taxes or unfiled tax returns tip #1: Know that there is a solution to every problem.

If you have unfiled tax returns it is always better to file them — whether they’re a couple days or a couple years late — than to not file them at all. Filing any tax returns that are due as soon as possible can help you resolve IRS back taxes and reduce additional interest and penalties. The longer you put off dealing with past due taxes, the more serious your IRS problems will be. Failing to file tax returns makes you vulnerable to potential IRS collection tactics, such as a levy on your wages or bank account, and may be construed as a criminal act by the IRS, punishable by one year in jail and $10,000 for each year not filed. Regardless of what you’ve heard, you have the right to file your original tax return, no matter how late it’s filed. So whether you have 1 year or 10 years of unfiled tax returns, know that there’s a solution to every problem.

Tax relief from back taxes or unfiled tax returns tip #2: Get help to save time and money.

If you owe more than $15,000 in back taxes or have 3 or more years of unfiled tax returns, it’s important to hire an attorney or tax specialist. An expert tax relief professional can help you save time, money, and frustration by educating you up front on what you need to do to resolve your specific IRS problems – while helping ensure you don’t pay a penny more than you have to.

Tax relief from back taxes or unfiled tax returns tip #3: File your tax returns before the IRS files them for you.

If you don’t file your taxes, the IRS may file them for you. What many people don’t know is that the IRS prepares substitute for returns in the best interest of the government, which often results in the overstatement of what taxpayers owe in back taxes and IRS penalties.

So even if you can’t afford to pay your tax bill, it’s important to file your most recent tax returns, as well as any prior delinquent tax returns, as soon as possible so you can have the chance to state what you truly owe. This will ultimately save you money and help you avoid significant long-term financial repercussions.

Tax relief from back taxes or unfiled tax returns tip #4: Make the IRS an offer they can’t refuse.

If you qualify for an offer in compromise tax settlement, you can save thousands of dollars in back taxes, penalties and interest. Negotiating and winning tax settlements is easier with the help of expert tax resolution specialists.

If you don’t qualify for an offer in compromise, there are other tax relief options including negotiating for your account to be placed in a “currently not collectible” status. A Certified Tax Resolution Specialist can help you explore potential tax relief options.

Tax relief from back taxes or unfiled tax returns tip #5: Get on a plan.

If you can’t pay your back taxes in full but could potentially pay them back over time, you can negotiate a reasonable monthly payment plan with the IRS. An attorney or Certified Tax Resolution Specialist will agressively negotiate an arrangement for the lowest possible monthly payment and options for making those payments. Once an IRS Payment Plan (also known as an Installment Agreement) is established, the IRS will not enforce collection action, including the levy of bank accounts or wages, as long as you remain current with all filing and payment obligations. However, interest and penalties continue to accrue.

Additionally, a tax lien may be filed as part of the terms of the installment payment agreement, depending on the amount of the total back tax liability. While it is always in the best interest of the IRS to get a signed waiver, it may not be in the taxpayer’s best interest, so seek the advice of your attorney or tax resolution expert first.

The IRS is trying to put forth a kinder and gentler image in the face of the current economic meltdown. But the fact remains that in order to get the tax relief you need, you may need help filing those unfiled tax returns and paying the back taxes you owe. Remember that the key word in tax relief is relief, and you now have the power and the knowledge to make that happen.

More Tax Help, IRS News and Tax Relief Tips:

  1. Tax Help News: IRS Enforcement to Get Priority, Big Bucks in 2010
  2. Michael Rozbruch Interviewed in Opportunist Magazine
  3. It’s Not Too Late for Taxpayers with Unfiled Tax Returns to Resolve IRS Problems
  4. IRS News: Feds May Withhold Tax Refunds to Enforce Health Insurance Mandate
  5. Ask the Certified Tax Specialist – Small Business Back Taxes

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