Five Steps to Solving your Unpaid Tax Problem Articles | Taxes

By: Jeff Morgan

If your taxes have gone unpaid for a year or longer, you may be very worried about the possible consequences. In particular, you might be worried that if you try and correct the problem by paying what you owe, you’ll end up in trouble due to the taxes you’ve missed paying. Many chronic non-filers avoid paying taxes year after year for this very reason, and the problem continues to grow as each successive year of non-payment goes buy.

However, you’re more likely to be in hot water if your non-payment is discovered by some other means than if you front up and tell the IRS yourself. It might be difficult to believe, but the IRS will more than likely be willing to allow you to correct the problem. Unless you’ve intentionally committed fraud, they’re unlikely to go to any extreme lengths to penalize you.

So what do you need to do to get those back-taxes paid?

The first thing you need to do in solving this problem is by far the hardest: contact the IRS. Tell them how many years’ worth of taxes you owe, and tell them you plan to fix the problem. So take a deep breath, and pick up the phone. Once this step is taken care of, you’re working towards solving the problem, and that makes it much easier.

Once you’ve contacted the IRS and told them the years you missed, you must calculate how much you owe. This won’t be easy, as you may have several years’ worth of taxes to calculate. Start out by calculating your income for the years you owe. At this point you might find it helpful to check with the IRS to see if they have any records of your income for these years.

Once you have the income information you need you can get everything in order and calculate how much tax you owe. Don’t forget to factor in any deductions you were owed, as these will help make your tax bill a little smaller.

When you’ve finished calculating your taxes and filled out the paperwork, it’s time to file. Alternatively you may have decided to simplify the process and hire an accountant or tax preparation service. Either way, once you’ve filed your taxes you’ll be able to confirm how much you owe.

Finally, it’s time to pay your taxes. The preferred method will be sending payment with your tax return, but if you’re not able to manage, send as much as you can afford and discuss a payment or installment plan with the IRS. After they receive your tax return the IRS will mail you a letter to let you know whether you must pay any penalty for filing your taxes late. As with the taxes, you can pay these immediately, or arrange with the IRS to create a payment plan.