While taxes are one of the only sure things in life, they are still a source of much fear and confusion, especially when it comes to back taxes. Many opt to avoid the IRS altogether by not paying any income tax rather than figure out the complicated forms and procedures set down by the government. Others may not even think about filing taxes or may even simply forget. No matter the reason, back taxes will catch up to you and will have dire and severe consequences for the parties involved.
What are Back Taxes?
Back taxes are payments owed but not made to the IRS for that year or period. Each year those persons that have an income are required to file with the IRS. In some cases the person will receive money back, but in others that person owes money and must make prompt payments or suffer penalties and fees. Should an individual fail to file when they owe money, the IRS will seek payment through the form of back taxes. Back taxes can have disastrous effects on all aspects of that person's life.
Liens Against Property
The IRS will notify you of any taxes that are owed. If you act immediately you may find that the IRS will be more than willing to help you pay the money you owe and you can avoid any further unpleasantness. If, however, you ignore the notifications and show that you have no interest in paying the money, the IRS will take actions against you such as placing a lien on any properties you may own. This lien prevents you from selling the property until the title is cleared. The lien will even appear on your credit report negatively impacting the score. With a lowered credit score you will find that applying for jobs, rental properties, mortgages, and even buying a new car will be difficult, if not impossible. So much depends on a good credit score nowadays that it is vital to keep it as high as possible.
Getting Legal Help
A tax attorney will be able to help you deal with the IRS and whatever back taxes you may owe. They will be able to explain your options and make arrangements with the IRS so you can pay what you owe without severely compromising your lifestyle. When the debt is cleared the IRS will lift any liens they may have placed and reestablish your credit into good standing. It is crucial to approach the IRS as soon as you discover that you owe taxes. A good lawyer will be able to guide you in the proper procedures and know just what to do in order to pay the money owed and prevent any further devastating effects to your credit score.
