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Tips for Reducing Your Back Taxes

June 19th

For many people, there’s no worse pit-in-your-stomach-feeling than finding out that you owe back taxes. Often, extenuating circumstances such as familial or job issues are what result in IRS debt. When these circumstances don’t resolve, the situation gets worse as interest or late fees mount up, but there are fortunately ways that you can negotiate with the IRS. By maintaining a calm demeanor with open lines of communication, you might be able to reduce the amount of back taxes you owe.

How to Deal with Your IRS Debt

The most important element of reducing your back taxes is to act immediately. Once you realize that you’re going to owe IRS debt, take action by contacting a tax debt lawyer or handling the situation yourself. Fees and interest can quickly add up, making the situation worse, so it’s important to be proactive in handling your situation.

Try Erasing Your Late Fees

One of the biggest ways to reduce the IRS debt owed is to erase your tax fees. If there was a tragedy in your family such as an illness, death, natural disaster, or something completely uncontrollable, you might be exempt from the burden of late fees on your back taxes. Notify the proper authorities by mailing a certified letter stating that you believe you have reasonable cause for failing to pay on time and that you would like to suggest and request the abatement of any late fees or interest on your back taxes. When explaining why you were late, try to keep it as short, yet detailed as possible. In other words, be factual, not emotional.

Pay Back Your IRS Debt

While you might not be able to eliminate back taxes, the quicker you pay back IRS debt over time, the less you’ll owe. Similar to paying back any type of debt, try to make payments the largest reasonable amount that you can afford. If you can’t pay everything back in six years, complete form 656B and apply to have your back taxes reduced.


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