Back Taxes Happen--There are Solutions

Back taxes are accrued from a previous period due to insufficient or lacking payments.  An individual may fail to report taxable income or underpay taxes intentionally or unintentionally, but no matter the reason, tax agencies reserve the right to demand payment and impose penalties, fines, and interest.

Although a person may owe back taxes to the state or local agencies, the term is usually used in reference to federal taxes. Every year, a large number of individuals in the United States fail to file tax returns.   While some may only remain delinquent for a year or maybe two, a large number miss filing their tax returns for several years.

There are several reasons why individuals miss filing their taxes, the most common reason being a lack of funds. Once a person misses filing his or her tax returns for a number of years, the accumulated cost might be too much to bear, and the individual feels that there is no option but to continue avoiding filing. The problem with avoidance is that back taxes always have a way of catching up with one sooner rather than later.

While some might be desperate enough to think that going off the grid is a viable solution to avoid paying back taxes, federal tax agencies have a wide network and will definitely catch up with anyone defaulting. The best option is being upfront about debt. Tax agencies want people to pay what they owe, and throwing them in jail is not the best way to get them to do that.  Get the help of an experienced tax consultant to come up with a solution to your problem. They'll help you in your negotiations with the IRS.

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