What to Do If You Owe the IRS Back Taxes // 4 Simple Steps

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Summary: We review four simple steps you should take if you owe the IRS back taxes. 

what to do if you owe the irs back taxes

Any time you owe the IRS, life can seem quite bleak. And that’s especially true if you don’t know what to do about your back taxes. 

But don’t sweat it

Your situation might not be as bad as you think.

Maybe I should clarify.

Owing the IRS is no joke. If you’re not realistic about your situation, interest and penalty fees can grow your balance of $10k to $15k in back taxes into an enormous amount.

You need to take action – and fast.

Tax debt relief companies can cut to the chase and get you on the right path. 

You might think you can handle it yourself, although hiring a professional will take much of the pressure off of you and almost certainly save you money. 

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No Money to Pay the IRS?

Get a free consultation with a tax relief expert to see if you qualify for the Fresh Start.

It's quick, easy, and free.

Mostly, whether you attempt the DIY route or work with an expert depends on how much you owe and how much time and effort you can afford to put into resolving the issue.

One thing is for sure…

You can’t ignore the problem and hope the IRS will fade into the background.

You're here because you already know about the power of the IRS, their power to garnish wages or file a tax lien on your property, and it's reached the point where you need to act.

You're in the perfect place!

By the end of this article, you'll be able to make a great decision about your next step whether it will be attempt this on your own or choosing to hire an expert to help.

Step 1: Ask For More Time

If you expected a tax refund, getting hit with a bill can catch you by surprise. 

But you’re not alone.

Twenty-one percent of Americans are expected to owe taxes for 2019, according to the U.S. Government Accountability Office.

Whatever you do, don’t panic because that will only make it worse.

Take a deep breath.

A good first step is to file an extension.

The IRS can give you another six months to figure out what to do if you owe back taxes. All it takes is sending Form 4868 to the IRS by the tax filing deadline.

Give yourself a break.  8% of all U.S. taxpayers are delinquent.  You are not alone!

There’s just one catch.

When you ask for an extension, the IRS prefers you pay the entire balance you owe. If you can’t pay it in full, you should send them as much cash as you can afford.

Why should you do that?

Easy. Because the IRS charges penalty fees and interest on balances, even if you file for an extension. 

And here’s the thing:

The more you pay now, the less you’ll have to deal with later.

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See if you qualify for tax relief.  Get a free consultation with a tax relief expert to see if you qualify today.

It's quick, easy, and free.

Step 2: Get A Second Opinion

Whew. You filed for an extension and can breathe a sigh of relief.

But now what?

Well, there’s just one thing to do: you need to get to work.

Take a second look at your taxes. Go over your return with a fine-tooth comb to look for deductions you might have missed. It won’t hurt to double check your math, either.

Now, this is important.

If you haven’t already, it’s time to call in the experts. 

I think you’ll agree with me when I say taxes are complicated. 

When things are complicated, it only makes sense to take it straight to the pros.

Sure, you’ll have to fork over some cash to have an expert review your return. 

But a tax pro could save you a ton of money by finding tax credits or deductions you didn’t know about.

Get a free second opinion!

Examples of success:

I browsed through dozens of testimonials from tax relief companies to find these.  Of course there were dozens and dozens I found for a higher starting balance.  

Initial Amount Owed

Resulting Amount Owed

See Testimonial

Tax Relief Company Used

Eric Owed $15,000


Miguel Owed $11,000


David Owed $15,000

Less than $1,000

Gary Owed $13,000


Step 3: Figure Out How To Pay

Working with the IRS is intimidating.

But they’re not monsters.

The IRS has a few options to pick from if you can’t pay your taxes in full.

There’s just one thing to keep in mind.

Anytime you owe the IRS money, you get interest charges and monthly late payment penalties tacked on to your balance.

Quick Tip:

Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.  We recommend you speak to an expert to see if you qualify for tax relief first.

The interest and penalties will add to what you owe, and your balance will only get bigger the longer it takes for you to pay your balance.

So here’s what you do…

Contact the IRS to set up one of these payment options:

  • Short-term extension: If you can’t pay now but can pay in the near future, ask for an extension to get an additional 120 days to pay the balance in full. 

  • Monthly payment plan: A monthly installment agreement with Form 9465 will allow you to pay the same amount each month until the balance is paid in full.

  • Offer in Compromise: It’s uncommon, but the IRS might forgive all or part of your tax debt if you meet specific qualifications.

  • Hardship delay: If you’re in a really tight spot, the IRS can delay collection. This option is only available if paying your taxes means you wouldn’t have enough money left over for your basic living expenses.

Offer in Compromise Mistakes:

Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents!

Benefits to Hiring a Tax Relief Company:

You might think the only benefits to using a tax relief company would be to help reduce a balance.  But after reading hundreds of reviews of tax relief companies, we’ve discovered that tax relief companies help Americans in a variety of ways:

  • provide guidance on audits
  • help set up payment agreements with the IRS
  • help get current on any unfilled tax returns 
  • some may be able to stop potential penalties such as wage garnishments

Most importantly, they pause the stress of dealing with the IRS - Typically any case submitted to the IRS takes months (or years) to review.  While waiting for their response, the IRS typically suspends any collection activities, and will often life wage garnishments, as is the case with an Offer in Compromise submission.

Our #1 choice for tax debt relief is Optima Tax Relief.  Click here to set up a free consultation.

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IRS Writes Off Millions Yearly

See if you qualify for tax relief.  Get a free consultation with a tax relief expert to see if you qualify today.

It's quick, easy, and free.

Step 4: Talk To The IRS

Here’s the bottom line…

You have to talk to the IRS.

If you don’t, you’ll be in serious hot water.

Even if you can’t pay your tax bill, file your return anyway. And if you get a notice from the IRS that says you owe a bunch of money, don’t panic.

There are options.

Plus, you don’t have to do it alone. A tax professional can help you find credits and deductions to (hopefully) lower your tax bill.

And if you’re in over your head, a tax debt relief company can point you in the right direction. Our preferred pick is Optima Tax Relief. They’ll give you a free consult and take the stress out of dealing with your back taxes.
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No Money to Pay the IRS?

Get a free consultation with a tax relief expert to see if you qualify for the Fresh Start.

It's quick, easy, and free.

What’s Your Next Step?

If you owe less than $10,000 in debt, there’s a pretty good chance you can take care of your back taxes without calling in the professionals.

But do you know what?

Doing it yourself isn’t always the best solution.

Sometimes, taking a DIY approach can do more harm than good. In those situations, you’re better off calling a professional tax debt relief company.

After all, most offer a free consult so you can get an expert opinion.

Even if you decide to handle it on your own, make sure you communicate with the IRS.

Because here’s the bottom line.

The IRS can help. But only if you face the music and make arrangements to pay the taxes you owe.

Get a free second opinion!

amy beardsley

By Amy Beardsley

Amy is a personal finance expert and freelance writer and owner of Early Morning Money, She has bachelor degrees in business administration and legal studies, and her work has been featured on The Huffington Post, Money Tips, and many other personal finance publications. 

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