IRS Back Taxes
Are you looking for a way to settle your owed IRS back taxes? IRS tax settlement help may be just a phone call away. Our trusted tax lawyers have years of experience helping clients with their back tax liabilities. To find out if you qualify for IRS back tax settlement contact us today by calling 1-888-TAX-LADY or by using our contact form.
What are Back Taxes?
Back taxes – or tax debt – are unpaid taxes assessed against a taxpayer by a level of government (i.e. Federal, State, Local) that are past due. Internal Revenue Service (IRS) back taxes are past due federal income taxes. The IRS assesses back taxes one of three ways.
How to Resolve IRS Back Taxes?
The fastest way to resolve your Internal Revenue Service (IRS) back taxes is by paying them in full, via our Full Pay Service. Paying them in full, includes paying the interest and penalties that have accrued on the IRS back taxes since they were originally assessed. The penalties and interest can quickly add thousands of dollars to your IRS back taxes, since they are constantly accruing.
IRS Revenue Officers
Internal Revenue Service (IRS) revenue officers (a/k/a ROs) are the elite members of the IRS collection force. There are approximately 6,000 revenue officers operating nationwide. Each is assigned to a particular field group of 10-12 revenue officers, managed by a Group Manager, and assigned a specific geographic area. The IRS grants revenue officers absolute collection authority.
Trust Fund Recovery Penalty
Internal Revenue Code Section 6672 liability is referred to as the “Trust Fund Recovery Penalty” or “Civil Penalty” and is the legal basis for the federal government to collect “trust fund” taxes. In the context of employment taxes, the term “trust fund” taxes refer only to taxes withheld from employees for the payment of federal income tax and one-half of the Federal Insurance Contributions Act (FICA) that fund Social Security and Medicare programs. Such taxes are reported on the Form 941 tax return that is filed by an entity with W2 employees on a quarterly basis and reports the gross wages paid, the federal income tax withheld, the sum of employer’s and employees’ FICA liability, and the deposits paid. After the deposits (if any) are accounted for, the taxes still owing are to be paid with the return. The unpaid balance due from these taxes may be the subject of a Section 6672 assessment.
Trust Fund Recovery Penalty (TFRP)
The Trust Fund Recovery Penalty is associated with the failure to pay “payroll” taxes. Payroll taxes refer to the Social Security tax and the Medicare tax. Social Security taxes are designed to provide benefits for retired workers, the disabled, and the dependents of both. Medicare taxes are designed to provide medical benefits for certain individuals when they reach age 65. Federal income taxes, compared to payroll taxes, are used to pay for national programs such as national defense, community development, and law enforcement.
Business Entities
There are a number of different ways a business can be organized. The method of organization can affect the way the IRS will collect taxes if the business falls behind in its business tax obligations. Some of the most common business entities are: sole proprietorships, general partnerships and corporations.
Statute of Limitations on Collections
The Statute of Limitations on Collections is the amount of time that the Internal Revenue Service (IRS) has to collect a back tax liability from a taxpayer. The date that owed back taxes expire is referred to as the “Collection Statute Expiration Date” (CSED). According to the Internal Revenue Code, Section 6502, the IRS generally must collect the back taxes “within 10 years after the assessment of the tax debt.” Depending on the taxpayer, the assessment of tax may be the date a taxpayer files a tax return with a balance owing back taxes or the date that the IRS files a tax return on behalf of a non-filer taxpayer. Thus, the statute of limitations will begin once the tax has been “assessed” by the IRS.
Automated Collection System
If you are one of the millions of Americans who are behind on your back tax payments, you are probably already familiar with the Automated Collection System or ACS. This branch of the IRS is the first contact most taxpayers have with the IRS after receiving a past-due tax bill. As its name suggests, ACS is a large, computer driven system that attempts to collect owed back tax liabilities. ACS is responsible for sending out nearly all of the various collection letters and legal notices required to collect delinquent tax liabilities.
Field Collections
The IRS is one of the most aggressive, powerful and successful collection agencies in the world. A large part of this success is due to the substantial number of back tax collection professionals the IRS employs. These IRS back tax collectors have various titles, the most common of which is “Revenue Officer.” The IRS maintains field collection offices, staffed with Revenue Officers, throughout the nation. Most states have collection officers posted in multiple local offices.
Wage Garnishments
One of the primary functions of the IRS is to collect all federal income taxes. Congress has given the IRS a tremendous amount of authority and power to allow it to fulfill this function. Given these powers and the number of resources available to it, the IRS is one of the largest, most aggressive and successful collection agencies in the world. One of the most extraordinary powers the IRS has available is the ability to garnish the wages of taxpayers with back tax liabilities.
