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Recently I have heard and seen many commercials relating to IRS back tax help.  So what exactly is back tax help?  As a tax attorney who has assisted many clients in resolving their IRS debts and IRS problems, I have drafted the article and prepared the video below in an attempt to provide an explanation of what may constitute back tax help.

The word “back” would make one think “past due” or “late” and I would agree.  Generally, when I think of a back tax issue I think of tax debts that are due to the IRS or back (late) tax returns that are due to the IRS.  Thus, we will look at these two general areas and how a tax attorney can help a taxpayer with their back tax problems.

Back Tax Debts

Back tax debts can be accrued by individuals and businesses.  As a tax attorney, I would say the most common back tax debts are 1040 Individual Income Tax debts and 941 tax debts (employment tax debts).  1040 back tax debts are commonly accrued when an individual does not have enough income tax withheld and/or receives 1099 income (or income subject to self employment taxes) but does not make or account for estimated tax payments.  941 back tax debts are accrued when an employer pays the net pay check to employees but does not remit the self employment taxes and federal income tax to the IRS.  Of course, there are many types of back tx debts, but the two above are the  most common in my opinion.  So what help can be provided?

Back Tax Debt Help

What help can a taxpayer receive to resolve their back tax debt?  A taxpayer has multiple options in resolving back tax debts, which are generally related to the taxpayer’s current financial circumstances.  The taxpayer may be able to resolve their debt through an installment agreement or partial payment installment agreement.  Moreover, the taxpayer may be able to settle their IRS tax debt with an offer in compromise.  In addition to the above resolution options, if a taxpayer is making payment to resolve their debt, they may be able to lessen their liability with a penalty abatement request.  The IRS will consider removing or waiving the tax penalties assessed if the taxpayer can establish reasonable cause.  Having the tax penalties abated or waived can be quite a savings because the failure to file penalty can be 25% and the failure to pay penalty can be up to 25%.  Depending upon the circumstances, a taxpayer may be able to resolve their back taxes with a claim for innocent spouse relief or equitable relief.

Back Tax Returns

If a taxpayer has not filed all of their current tax returns then they must file such returns given they have income that would require the filing of the return.  Having back tax returns creates multiple issues for a taxpayer.  Many taxpayers fail to file a return because they filed previous returns and owed taxes.  As part of any resolution to a tax debt, a taxpayer must have all current returns filed with the IRS.  Thus, having back tax returns can inhibit a taxpayer’s ability to establish a resolution for back tax debts.  Further, failing to file a tax return leads to additional tax penalties and is illegal.  The IRS could criminally prosecute an individual or business for failing to file tax returns.

Back Tax Return Help

If you back tax returns (missing tax returns) you need to take the necessary steps to have the returns prepared and filed with the IRS.  You can obtain your wage & income information by contacting the IRS and requesting your wage & income transcripts.  Of course, if you own the business and the business has not filed returns, including informational returns, certain income information may not be reported on your wage & income transcript.  The bottom line is, you need to compile the necessary information and prepare the return yourself, or discuss having the tax return prepared by a tax professional. Often, preparing tax returns and filing the returns with the IRS is the initial step in resolving a tax matter.  Until the returns are all filed, you are unsure as to the amount of the liability, and you are not in compliance and thus in a position to make any proposal to the IRS.

Speak with a Denver tax attorney at The McGuire Law Firm regarding your back tax issues.  A tax attorney can help you with your back tax matters and hopefully educate you and work to prevent the issues from occurring again.

Denver IRS Back Tax Help

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