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What Should I do if I Owe Back Taxes?

Mary McMahon
By
Updated May 16, 2024
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Back taxes are taxes to a national government owed from previous years. Because they were not paid when they were due, the taxes will also typically incur interest and fines until they are dealt with. It is highly advisable to deal with back taxes as quickly as possible, because many tax agencies have the authority to enforce liens and other actions on you, thereby forcing you to pay your unpaid taxes.

There are a number of reasons for back taxes to accumulate. Some taxpayers, for example, may not realize that they owe taxes, or they may have been given erroneous information. Some taxpayers simply do not file tax forms, while others choose to deliberately evade their taxes. Both individuals and businesses can owe back taxes, and the consequences can be very serious if the taxes are not dealt with.

If you owe back taxes, it is better to approach your tax agency than to sit and wait for the tax agency to approach you. Many tax agencies, such as the Internal Revenue Service (IRS) in the United States, will offer amnesty to tax payers who demonstrate the intent to pay off their unpaid taxes. A taxpayer who asks for help may be offered a payment plan or another form of assistance. If the tax agency has to sent out representatives, however, the agency can and will get nasty.

Generally, the best way to deal with back taxes is to fill out the relevant tax forms for each year that your taxes were unpaid to determine how much money you owe, if any. The government may actually owe you money; many people who do not file returns have overpaid their taxes, and they are entitled to refunds. If your back taxes are complicated, you may wish to hire an accountant to help you. Pick an accountant who knows tax law well, as he or she may be able to help you negotiate with the tax agency.

If you cannot pay your overdue taxes in a lump sum, request a payment plan. You should sit down and think about your budget, and determine how much money you can offer to pay. By coming to the tax agency with a workable plan, you can impress them with your desire to correct the problem. Be aware that a tax agency may be able to confiscate property, place liens on financial accounts, and perform other actions to recover the money you owe them.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
By anon936245 — On Feb 28, 2014

Can the IRS take your car because you owe back taxes?

By anon345435 — On Aug 19, 2013

I owe $2,500 on as federal tax return from 2012. Not because I want, but because I lost everything that I had.

By anon127650 — On Nov 16, 2010

I found out that I owe about $1200 in taxes! the bleeps didn't even have the decency to call or answer their phones. They just sent me a poorly copied invoice with threats of interest charges. No wonder there's a tea party movement!

By anon24586 — On Jan 14, 2009

how can i find out if i owe taxes i have not filed for 2 years.

By anon9703 — On Mar 11, 2008

how can i find out if i owe IRS back taxes? not sure .

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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