| First of all, if you owe back taxes, don't be | | | | complicated. |
| embarrassed. Millions of people are in the same | | | | If you owe back taxes and simply cannot afford to |
| situation as yours. This is especially true for individuals | | | | pay your back taxes in full or via an installment |
| who are 1099'd. No taxes are withheld, which at the | | | | agreement, you may qualify for a Currently Not |
| time is great because you have more money to | | | | Collectible Status. This is basically where your overall |
| yourself. And you think, "By this time next year, I'll have | | | | situation and your current financial situation prove that |
| the money saved up." But unfortunately that is usually | | | | you just can't afford to pay on that for now. Often |
| not the way it turns out. Instead, saving your money | | | | times the IRS will freeze their collection efforts for up |
| becomes very difficult. Things happen in life that just | | | | to two years in order to give you time to work this out. |
| seem to get in the way of your plan to save up | | | | Other plans include debt reduction plans such as an |
| money for your taxes. That's life. There's nothing you | | | | Offer In Compromise. This is a program that allows |
| can do about that now. Instead focus on the present | | | | you to pay less than what you owe. Keep in mind that |
| time. You owe back taxes, so what are you going to | | | | this can be a lengthy procedure. |
| do about it? | | | | An interesting point is that sometimes a large |
| If you owe less than $10,000 the IRS will put you on a | | | | percentage of your back taxes are made up of |
| payment plan. If you can afford that, then great! But if | | | | interest and penalty. Under certain circumstances, you |
| you can't afford that arrangement, or if you owe more | | | | may qualify to have your penalties abated. You can |
| than $10,000, then you may have to look at alternative | | | | request your tax records from the IRS to determine |
| methods of resolving this situation. If it comes down to | | | | exactly how much you have been charged in |
| negotiating a settlement, then it's important that you | | | | penalties. Be forewarned that there is a lot of red tape |
| know this: The IRS will not negotiate a settlement until | | | | with the IRS since they are the country's largest |
| all of your taxes have been filed. | | | | collections bureau. You may want to consider |
| So for example, if you have not filed for the years | | | | consulting with an IRS Resolution Firm to settle your |
| 2005, 2006, and 2007, you'll need to have your taxes | | | | back taxes if you don't have the time necessary to |
| prepared. A reputable tax representation firm will | | | | devote to the situation, or knowledge required to |
| prepare your taxes on your behalf if you decide to go | | | | prepare your documents and file any necessary |
| that route. If your returns are simple and you have | | | | urgent actions such as stopping or preventing a |
| done them before, then you may be able to do these | | | | garnishment or levy. There is much help with back |
| on your own. Frankly however, you may want to put | | | | taxes available but first you need to decide to take |
| some serious thought into that. Taxes can be very | | | | action. |