Back Taxes

Back Taxes – What Are They?

Back taxes refers to delinquent taxes which are overdue. Back taxes come into existence a few different ways.

  • If a taxpayer fails to file returns for a number of years, the IRS will file returns for the taxpayer and thereby assess a tax.
  • If a taxpayer is audited and the IRS determines more tax is due, a “back tax” is then also assessed against the taxpayer.
  • When a taxpayer files returns but is unable to pay the tax due, then a back tax is assessed against the taxpayer.

Will I Owe Penalties for Back Taxes?

Back Taxes Generally, penalties accrue when a taxpayer fails to file and/or pay taxes on time. The IRS will sometimes abate the penalties if the taxpayer can meet a legal standard known as reasonable case. Usually, reasonable case means that the taxpayer was a victim of crime, substance abuse, mental disease or natural disaster. The taxpayer must have some sort of documentation to prove the event.