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How to take care of a past due tax debt

On Behalf of | Jul 21, 2021 | Tax Debt |

If you are a Washington business owner who owes back taxes to the IRS, it is in your best interest to settle your debt as quickly as possible. This is because interest will continue to accumulate on any outstanding balance until it is repaid, and you could incur additional penalties if you fail to take action in a timely manner.

Payment plans may be available

If you cannot pay an outstanding tax debt by its original due date, it may be possible to enter into a payment plan with the IRS. As long as you stay current with your payments, the government will not take further action against you. This means that you won’t have to worry about a bank account being seized, as just one possible penalty. It’s important to note that your payment plan might be terminated if you incur an additional liability.

Is an outstanding tax debt causing a financial hardship?

The IRS may consider classifying your account as currently not collectable. This means that no enforcement action will be taken until your financial circumstances improve. However, once this happens, you will be expected to pay your back taxes in full.

Respond to all IRS notices

If the IRS sends a notice, be sure to reply to it within 30 days. In most cases, simply acknowledging the letter is enough to keep the federal tax agency from taking further action against you. On the notice itself, there is a phone number that you can call if you have any questions about what the government needs from you. There may also be instructions as to how you can pay a past due tax debt.