If you live in Houston and you’re struggling with back taxes, Tax Defense Partners is here to help. Dealing with back taxes can cause an enormous amount of stress— but that stress isn’t something you have to keep living with. The dedicated tax professionals at Tax Defense Partners can help you resolve your back tax issues swiftly, easily, and for the lowest possible amount allowed by law. Whether you live in the Houston area or another part of the Lone Star State, our tax professionals are familiar with every available tax resolution strategy and can help you get fast relief from your IRS tax problems.
Back taxes can come with a variety of penalties, fees, and, eventually, late stage IRS actions such as liens or levies. The penalties and fees associated with back taxes can be different depending on whether you have failed to pay your taxes or failed to file altogether. To understand the penalties associated with back taxes, which must also be paid when you settle your tax debt, let’s take a look at the difference between failure-to-file and failure-to-pay penalties and fees.
“Failure-to-File” refers to when a taxpayer doesn’t file their tax return. Whether this is done knowingly or by accident, the penalties and fees are the same. If you are more than 60 days late in filing your tax return, the IRS will assign you a flat fee of either $135 or the amount of taxes owed, if that amount is less than $135. After this flat fee, the IRS charges an ongoing fee of 5% of your tax balance per month, until you hit a 25% cap.
“Failure-to-pay” refers to when a taxpayer files their tax return but does not pay taxes owed. This can be the case if you fail to pay either all or part of your full tax balance. Failure-to-pay is a common reason people find themselves with back taxes and this status is often the result of being unable to pay a full tax balance, rather than just neglecting to pay.
The failure-to-pay penalty is lower than the failure-to-file penalty. This fee is 0.5% of your unpaid taxes per month, rather than 5% of your tax balance per month. This fee is ten times lower than the failure-to-file fees, so it is generally best to always file your taxes, even if you think you may be unable to pay at the time of filing.
If you’re struggling with IRS problems, our full service tax resolution services can get you relief, quickly. Our team of dedicated tax attorneys and IRS enrolled agents have years of experience resolving tax issues that range from simple to incredibly complex. Our IRS problem resolution services are tailored to your unique needs. Whether you need help negotiating the best possible installment agreement, need full audit representation, need help with future tax preparation to avoid tax problems, or if you just don’t know where to begin, our team is dedicated to giving you the best possible service and helping you pay the IRS the lowest amount allowed by law.