Paying Back Taxes to the IRS

It isn’t fun dealing with the IRS when you owe back taxes,although the process of paying them back is straightforward. It’s important to communicate with the IRS if you are in this position rather than just ignore the situation; they will work with you,and they have the authority to garnish your wages or repossess your vehicle in situations of non-payment.

Whether you file your own taxes,or pay someone to prepare them for you,if you owe Federal tax on your return,you will get a letter from the IRS in the next few weeks,asking for payment. It’s important to file your tax return anyway,even if you owe money; not doing so can lead to extra interest and penalties. At this point,you have two choices,to pay the outstanding amount or to arrange a payment plan with the IRS,making monthly payments until the balance owed is paid.

If you choose to enter into a payment plan,you have some control over the amount and the due date. The IRS will send you a monthly bill and payment history. The IRS also offers direct debit from your bank account and of course you can pay more than the minimum amount if you can afford to. The payment plan can be set up or changed online,meaning that you can do all of this without having to talk to anyone. And if you owe back taxes for the following year also,the IRS will roll that amount into your existing payment,although your monthly repayment amount will be higher.

The IRS has tried to make this process as painless as possible,especially since its Fresh Start program was introduced in 2011. However,the bottom line is you still need to pay that money back,and it’s worth taking steps to adjust your tax withholding so you don’t keep having the same problem.

For more info:law firm


Leave a Reply

Your email address will not be published. Required fields are marked *