What are Back Taxes?
Tax debt that is unpaid and past due taxes are assessed against a taxpayer by the government (i.e. Federal, State, Local). Federal back taxes are owed to the Internal Revenue Service (IRS). Back taxes are owed for not paying taxes when they are due, failing to report all income on a tax return, or failing to file a return.
Back taxes are taxes owed from a previous year or period. When a person owes taxes, but does not pay them when they are due, the result is back taxes. Likewise, underpaying tax obligations also results in back taxes. A person may underpay taxes or fail to report taxable income intentionally or by accident. Regardless of the reason, however, tax agencies have the right to demand immediate payment and impose significant fines, penalties, and interest as well. Though an individual may owe back taxes to a local, state, or federal tax agency, the phrase is most often used in reference to federal income taxes. Each year, an amazing number of people in the United States fail to file federal income taxes. Some miss filing required taxes for a year or two, while others may miss filing for several years at a time. In fact, there are even some individuals who owe back taxes from decades ago. People fail to file required tax returns for a variety of reasons. For many, the reason is the lack of fun
Back taxes – or tax debt – are unpaid taxes assessed against a taxpayer by a level of government (i.e. Federal, State, Local) that are past due. Internal Revenue Service (IRS) back taxes are past due federal income taxes. The IRS assesses back taxes one of three ways. First, the back taxes are typically the result of a filed but unpaid federal income tax return. This means that a taxpayer filed his or her federal income tax return, but he or she failed to subsequently pay the tax due by the deadline (typically, April 15). Once the IRS processes the return and assesses the balance due, the taxpayer will now owe the IRS back taxes – plus an additional “Failure to Pay” Penalty. Second, the back taxes can be assessed against a filed and paid federal income tax return, when the return failed to account for all income earned during the previous year. This means that the taxpayer prepared, filed, and paid his or her federal income tax return. However, when preparing the federal income tax ret
If you don’t know what back taxes are, chances are quite good that you’ve managed to avoid having to deal with having IRS back taxes due. Back taxes occur when you miss filing your tax return for one or more years. For those of you who always file your taxes on time, you may be wondering why anyone would become enmeshed in having to file back taxes. Why not simply file your taxes every year on time? There are a variety of reasons that people have IRS back taxes due. Some people don’t file on time every year because they do not think that they have made enough money to warrant filing a tax return. Other people try to get out of paying taxes on undeclared income by not filing a tax return. Other times, people may have forgotten to file their taxes. Whatever the case, if this sounds familiar to your situation, then you may have IRS back taxes due. Do you have IRS back taxes due? The IRS will contact you, in most cases, if you are required to file back taxes. Other times, you may wish to f
Back taxes refers to unpaid taxes that a person or company owes to the IRS. About 20% of US tax filers either owe back taxes or are late in filing a tax return according to the IRS. Back taxes have a negative effect on your credit rating and can persist on your credit record for years. If you cannot afford to pay the full amount of your back taxes, you should still contact the IRS either directly or through the services of an Enrolled agent to explore any settlement options that you might qualify for.
