Unpaid IRS Taxes: What You Should Know

If I can’t pay my income taxes, should I still file my return?

The penalty for an unfiled return is much greater than the penalty for not paying. If you fail to file your return, the IRS charges a monthly penalty that equals 5% of your balance. The penalty starts on the date following the date that your tax return is due.

What happens if I cannot pay my taxes in full when they are due?

If you cannot pay your balance in one lump sum you may want to consider looking into tax debt settlement. CuraDebt Tax is able to negotiate with the IRS on your behalf and set up an affordable installment agreement, based on your financial situation according to the IRS guidelines. We are able to negotiate installment plans and other resolution options. If you are facing financial hardship, you may qualify for an offer in compromise, where you settle for less than what you owe.

Is there interest on unpaid taxes?

Interest on unpaid taxes is the federal short-term interest rate plus 3%. Every 3 months, the interest rate will change. The interest will not stop accruing until the amount due is paid off.

Will the IRS levy my assets for unpaid taxes?

The IRS has the power to levy your assets for unpaid taxes. The IRS will send several notices before this happens. The final notice is titled “Final Notice of Intent to Levy”. If you have received this notice, keep in mind that you only have a time limit of 30 days to respond. If you fail to respond to this final notice or fail to set up a resolution, the IRS will begin to levy your assets.

Can I settle unpaid taxes for less than what I owe?

If you are truly facing financial hardship, you may be able to settle for less than what you owe. At CuraDebt Tax, we have negotiated Partial Payment Plans and Offer in Compromises for clients that qualified. There are strict requirements for both of these resolutions. At CuraDebt Tax, we will go over your finances with you, and find the best resolution for you that you are qualified for.

How can CuraDebt Tax help me?

CuraDebt Tax has a team of tax professionals who are ready, willing, and able to help you with all of your tax related needs. Every taxpayer has a unique situation and varying consequences that arise from unpaid taxes and other tax related issues. 

What if I am unsure about how much I owe the IRS?

You can use the IRS’s online tool, call the IRS, request transcripts via mail, or look at the last notice that was sent to you by the IRS. Mailed notices will not have up to date information on interest and penalties. If you are having trouble finding out how much you owe, we are here to help. With us you will never have to worry about contacting the IRS on your own. We save you the stress and hassle. 

What if my spouse owes back taxes?

If your spouse owes back taxes, it is important to understand your legal liability for this tax debt. In most cases couples who filed jointly are liable for the back taxes of their spouse. If you filed your return separately from your spouse you will generally not be held liable for any unpaid amounts. Contact us today to find out if you qualify for Innocent Spouse Relief.

Do unpaid taxes show up on a credit report?

When taxes go unpaid, the IRS files a tax lien. At one point in time, tax liens would show up on credit reports. In 2017, that changed. Tax liens are no longer reported to credit bureaus. Although unpaid taxes do not show up on your credit report, they do impact your ability to obtain credit since creditors have other methods of obtaining information on filed tax liens.

What happens if I do not pay the IRS for 10 or more years?

If you fail to pay your taxes for 10 or more years, the IRS will charge you interest and penalties. After 3 years of failing to file, the IRS will usually file for you. This is called a Substitute for Return (SFR). The IRS prepares the return based on information it has from your employers, banks, and other payers. This tax return is prepared in an automated fashion and does not take deductions into account.

If you are burdened with tax debt, contact us today for your free consultation. We can help you with all of your tax related needs. 1-877-999-0486