Delinquent Taxes & Federal Returns – Definition and How To Resolve

Delinquent Taxes – How To Resolve Federal / IRS Income Tax

Resolving delinquent taxes is not impossible. Just because April 15th has come and gone without filing your return does not mean that you are out of luck and in trouble with the IRS. Knowing how to resolve delinquent taxes is something that will help you handle this problem without delay.

There are many reasons why you need to file delinquent taxes. But before you get into that, you need to learn the basics.

What Are Delinquent Taxes?

Simply put, delinquent taxes are any that have not been paid by the due date. So if you are late paying any type of tax, from federal to state to property, they are considered delinquent. It is important to take delinquent taxes seriously instead of thinking that you have forever to catch up. The IRS does not take kindly to people who do not pay their taxes on time. The same holds true for people who don’t file a return.

Why You Must Pay Delinquent Taxes?

Do you really need to ask this question? The reason that you have to pay delinquent taxes is because the law requires it. The IRS requires you to file a tax return and pay the proper amount of taxes every year. If you don’t, even if it is only for one year, you are committing a crime.

Additionally, if you do not pay your delinquent taxes your balance is going to continue to grow. You will owe the original amount, as well as penalties and interest of up to 25 percent. Not having the money to pay is not a good reason to put off filing a return or contacting the IRS.

Do you want to receive a tax refund in the future? If so, you better file and pay all your delinquent taxes or this is not possible. To go along with this, the IRS will not consider an offer in compromise or installment agreement if you have not filed all the proper returns in the past.

How to Pay Delinquent Taxes If You Don’t Have the Money?

If you do not have the money to pay delinquent taxes you should contact a tax relief professional to discuss your options. As noted above, the IRS will not entertain any type of tax settlement until all past returns are filed. So if you have yet to file a return from years past, you need to do this before you decide to open up the lines of communication with the IRS. The IRS is not going to put you in a bad financial situation if you don’t have the money to delinquent taxes. Instead, they will suggest that you consider one of the many options that they regularly make available (see below).

What If I Can’t Pay My Delinquent Taxes?

Those who cannot pay delinquent taxes in full have a couple of options to consider. The first one is an installment agreement. This is most common, and allows the taxpayer to send smaller amounts of money every month until the overall balance is paid. There are various types of installment agreements depending upon tax amount owed and the financial situation of the taxpayer. The only negative is that you will still incur interest and a reduced penalty amount along the way.

What about an offer in compromise? If you can prove that you do not have the financial means to pay your delinquent taxes the IRS may accept an offer in compromise in which your liability is settled for “pennies on the dollar.” Everybody who owes delinquent taxes is interested in this option, but only a small percentage can take advantage because the IRS is very strict about accepting these offers.

If you need to resolve delinquent taxes this information should help you better assess your situation and future direction. It is highly recommended that you talk with a tax professional about resolving problems with delinquent taxes. A tax professional can analyze your financial situation and your unique problem and find the best solution for you to resolve your problems.