What are Back Taxes?

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  • Written By: N. Madison
  • Edited By: Niki Foster
  • Last Modified Date: 17 October 2019
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Back taxes are taxes owed from a previous year or period. When a person owes taxes, but does not pay them when they are due, the result is back taxes. Likewise, underpaying tax obligations also results in back taxes. A person may underpay taxes or fail to report taxable income intentionally or by accident. Regardless of the reason, however, tax agencies have the right to demand immediate payment and impose significant fines, penalties, and interest as well.

Though an individual may owe back taxes to a local, state, or federal tax agency, the phrase is most often used in reference to federal income taxes. Each year, an amazing number of people in the United States fail to file federal income taxes. Some miss filing required taxes for a year or two, while others may miss filing for several years at a time. In fact, there are even some individuals who owe back taxes from decades ago.

People fail to file required tax returns for a variety of reasons. For many, the reason is the lack of funds. Afraid the balances due on their tax returns will be too much to bear, many individuals choose to skip filing altogether. Some intend to file at a later date, while others hope to avoid filing and paying indefinitely. However, back taxes have a way of catching up to those who avoid paying, sooner or later.


Fortunately, owing back taxes doesn't have to be end in criminal prosecution. By filing back taxes quickly and accurately, many individuals are able to minimize fines and penalties. Even if an individual owes taxes for several filing periods, most experts agree that filing late tax returns is far better than risking serious trouble by continuing to avoid them.

If you owe back taxes, you may want to seek the advice of a tax professional. A tax professional can help you assess your unique situation and determine the best strategy for dealing with the tax agency. A tax professional can also prepare your late returns for you, enabling you to get them in as quickly as possible. Furthermore, a skilled tax professional can negotiate with the involved tax agency on your behalf, perhaps even negotiating lower penalties.

If you are the do-it-yourself type, you can prepare your own returns. Just make sure you do your best to ensure the accuracy of your tax documents. There are many computer programs available that serve to make tax return preparation easy and fast. Keep in mind, however, that late federal tax returns must be filed on paper, not electronically.


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Post 7

I have not filed my taxes in eight years. I have a school loan debt of over $13k that is in default. What can I expect when I try to file my taxes this year?

Post 6

I would like to know if a state can come after a person to pay taxes on supposedly unreported income twenty years later, when no notification of them owing taxes had been previously made known, and almost twenty years later get a bill with a very hefty amount interest attached, with no explanation of what the amounts owed are for. Is there a statute of limitations on individual states?

Post 5

Under certain circumstances the IRS does indeed have an "unlimited" amount of time to assess/collect taxes. Check out their rules when they suspect fraud or have proved fraud. This could include a situation where income is under reported. But, they almost never wait that long if they think you're worth pursuing (i.e., substantial salary and the like).

Post 4

I owe both state (Massachusetts) and federal taxes for 2000 and 2001. Both were filed, but not paid. How do I make an offer of payment to both the IRS and Massachusetts asking them to forgive the penalties and interest, and part of the pricipal? I am currently in retirement, forced there by illness. I collect social security and the IRS has recently started taking 15 percent of my social security payment, as allowed by law. I also just started receiving disability for service connected injuries received while in the armed forces in the amount of $2673 per month. As I understand the law, the IRS cannot levy this money by law. I would like to get them to lift the levy on my Social Security funds and to allow me to pay my back taxes, after forgiving all of the interest, penalties and 25 percent of the principal. --Henry P. Sousa

Post 3

GCSmith: It is a completely false statement that the IRS has an unlimited amount of time to collect tax. The statute of limitations are clearly defined: 3 years for assessment of tax, and 10 years for collection.

Post 2

The iRS has an unlimited time to go after us for back taxes, but if the iRS garnished your wages and bank account for wages you did not earn and you finally have the proof, what recourse do you have. Does the same apply to the tax payer, do we have an unlimited time to prove the IRS wrong, recoup monies paid plus interest?

Post 1

The IRS can go after you for back taxes for an unlimited amount of time. What recourse does a tax payer have when they are finally able to come up with written proof that they paid back taxes that they did not owe. Is there a time limit?

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