Tax Service

Tax Service

What You Must Know About Back Taxes

From the tons of activities that keep us engaged, to life disruptions, and even procrastination, a myriad of reasons holds for late payment of taxes. Tax season may be behind us, but the smart thing to do would be to give attention to your Back Taxes. You’ll find out why in a bit.

What are Back Taxes?

Back Taxes are taxes that were partially unpaid or were not paid for at all in the year that they were due. This tax debt is owed to the Internal Revenue Service (IRS) – the agency responsible for the collection of taxes and enforcement of tax laws – and failure to take the appropriate actions attracts some consequences.

Failure to pay your taxes by the deadline, giving a wrong report of your income, or neglecting to file a tax return altogether are causes for back taxes.


Consequences of back taxes

As mentioned earlier, back taxes result from not paying your taxes fully or at all as at when they are due. Unpaid taxes accumulate interest and penalties steadily; and asides from this, they could eventually invite serious legal action from the IRS. Such consequences include:

  • Tax Lien: a tax lien is a legal claim made by the Federal or State government against your assets when you neglect or fail to pay a tax debt. The lien serves as a guarantee for payment of your tax debt, and to ensure that the government gets the first claim over any other creditor who also has legal rights to your property. Before a lien, you first get a Notice and Demand for Payment bill – a letter that explains how much you owe – the government may then place a lien on your assets, if you do not respond to the bill.
  • Wage Garnishment: wage garnishment or wage levy is a court judgment that orders that a portion of your income be withheld and diverted towards settling your debt. Wage garnishment is used to settle debts such as unpaid taxes, child support payments, and student loans. Your income will be diverted to the creditor up until your debt is paid off or otherwise resolved. Typically, for your earning to be garnished, the creditor must obtain a court order proving that you are delinquent in making a payment; but a court order isn’t required if the debt is owed to the IRS. A wage garnishment is usually the last resort to collect debts and can have an unfavorable effect on your credit ratings, which is why it is important to file your tax return even if you cannot pay by Tax Day – or better yet, pay your taxes if you can.
  • Jail Time: tax evasion is the legal activity of deliberately avoiding to pay tax liabilities, and in the most extreme situation, the IRS might pursue criminal charges against you for it. Tax evasion is a serious crime with jail time of up to 5 years as a penalty, so it’s best to respond as soon as possible to the Notice and Demand of Payment bill when it is initially sent.

Penalties and Interest charges

In 2020, the IRS pushed back the April 15 Tax Day deadline to July 15 due to the COVID-19 pandemic. This year again, the due date was extended – now taxpayers have until May 17 to file their return, ask for an extension and pay any taxes they may owe to the IRS.

Failing to file your tax returns and paying your income taxes by the due date can attract penalties and interest charges such as a Failure-to-File Penalty and Failure-to-Pay Penalty.

A failure-to-file penalty pertains to anyone who files their taxes after the Tax Day deadline, or to those who applied for an extensionafter the extension due date. The penalty is usually 5% of all unpaid taxes for every month or partial month that your tax return is late; and it starts accumulating the day after the May 17 deadline or if an extension is filed, the day after the October 15 deadline.

As of 2021, if you file your tax return more than 60 days past the May deadline or your extension date, the IRS can impose a minimum penalty of $435 or 100% of your unpaid tax; whichever is smaller – and this penalty won’t exceed 25%.

You will incur a failure-to-pay penalty if you don’t pay any taxes owed by the May 17 tax deadline, and it is important to know that the penalty starts to accumulate from the day after the May 17 deadline. However, the failure-to-pay penalty might be waived if you’re supposed to pay both types of penalties. Failing to pay your taxes attracts 0.5% of your back taxes for every month or partial month your payment is late.

In addition to these penalties, the IRS will charge you interest on the taxes you haven’t paid. Interest accrues and compound daily and is calculated from the date your return is due until the date your balance is fully paid.

It is best to complete your tax return on time to avoid these tax penalties and interest charges from the IRS. A better option if this is not exactly feasible is filing for an extension and paying your entire tax bill before the May deadline.

Getting Help for Your Back Taxes

Dealing with Back Taxes can seem scary and overwhelming, but it should come as a relief to know that the IRS has a range of program options you can choose from to settle your debt. A few of them are:

  • Setting up an installment agreement: this is a common way of paying back taxes to the IRS. This option lets you pay your debt over a long-term payment plan, with your total tax debt being divided into monthly payments over a certain period.
  • Providing an Offer in Compromise: this is a tax relief program, whereby, the IRS helps reduce your tax liability by considering your unique circumstance; such as your income, expense, and ability to pay. An offer in compromise allows you to settle your tax bill for less than what you initially owed.
  • Applying for a Currently Not Collectible status: this option is excellent for you if you are not in the financial position to pay your back tax at the current time. The IRS will declare your account uncollectible if paying back your tax debt will affect your daily living expenses. It is important to note that qualifying for this option won’t make your back tax disappear, but will only prevent the IRS from levying your assets or garnishing your income.

As seen, owing back taxes is not a pleasant situation, and it can be a hassle trying to resolve it all on your own, however, hiring professionals can make the whole process easier and stress-free. They can also help you find the best program that fits your unique tax situation. Need help resolving your tax issues? Book a Free consultation with Victory Tax Lawyers now to get started.

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Tax Service

Do Not Know Good Tax Company?

Nowadays, finding here we are at fundamental tasks for example filing taxes could be a hurdle for many. Lots of busy people usually fight to examine this stuff, resulting in only frustration. So, what many of them do is hire accountants of these expertise. The only real frustration from doing this may be the actual a part of hiring someone. Most business proprietors, in addition to corporate employees, need to be skeptic about disclosing their financial status with others.

However, you will find standards to become met. If an entrepreneur doesn’t know how to start with regards to his finances, he or she must manage to find a great tax company. What particular characteristics that this type of professional accountant shall possess? When hiring somebody, you must understand some important factors. Here are a few things you might want to consider when searching for a cpa.


An expert accountant you would like to handle your money shall possess a deep knowledge of the area. You might be able to inquire about the licenses she acquires, her educational attainment and encounters with regards to filing this obligation. A great professional accountant must have the ability to work things out, provide you with a review of your financial status, explain and discuss your choices and show you with the filing process.


Your selected tax company should be reliable and dependable. She must be professional and shall treat your files and finances a private matter. You wouldn’t like somebody that does not worry about not your hard earned money. She must have the ability to organize things, lodge a method to ensure that you to definitely better measure the standing of the finances. The selected professional should be someone you are feeling you are able to trust your money. It is always good if you would see a summary of their employers before. You should consider asking on her character references. Always perform criminal record check which means you knows whether you are getting a loyal one or perhaps a dishonest scanner.

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Why Do You Need To Hire Tax Service Out Of Your Area?

Probably the most hassling tasks in coping with business or perhaps an organization is filing the returns. Once the season for such is coming, lots of heads, proprietors and managers are anticipated to visit gaga over how these dealings ought to be transported out. While there are lots of accounting firms and expertise to help you perform such tasks effortlessly, you’ll need very reliable and credible people additional very delicate information. In addition to that, you will need somebody that provides you with offer services with high quality results and analysis.

But, it would be great to locate these traits in your tax service prospects round the locality? This way, everything is going to be as light and simple for you. If you’re still hesitating whether to consider companies around your neighborhood or otherwise, here are the reasons why you need to be hiring tax service from individuals in your area.

Hiring tax service out of your area could save you a lot of time, effort and cash.

Convenience is the main reason why you need to be choosing tax service around your neighborhood. After you have proven that the organization is reliable, credible and it has a history that can not be matched by other around your neighborhood, you are set for some good stuff.

Which includes not getting down the sink lots of effort communicating through phone, e-mail or even the like. You are able to personally visit the organization for the small business. It might be also simpler that you should satisfy the staff that’ll be caring for your project. That eliminates a lot of effort and time. Additionally, you will have the ability to receive analysis and results as quickly as possible. The travel duration of documents would not be that lengthy.

You’ll be able to save cash because they don’t charge around the greater popular nationwide companies would ask you for.

Hiring tax service out of your area is not so bad whatsoever.

There is a reason they’ve remained lengthy in the industry. And all around the country, you will find hundreds and maybe thousands of licensed accountants who’ve what must be done to provide competent recent results for your organization. It’s possible the companies around your locality have hired the neatest ones and trained probably the most skilled ones to be able to deliver the results that you’ll require.

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Tax Service Factors for the Small Business

Who needs tax service and just how exactly performs this business work? Are you currently in some way involved with mortgage and lending along with other transactions? You might like to continue reading if you wish to learn more.

Agencies engaged in the industry of supplying tax services must have expertise around the local taxing government bodies like the Bureau of Internal Revenue, as well as their tax collection procedures. This could then simplify the tax processing and reporting towards their customers and provides them the capacity to process payments in areas that they haven’t before serviced loans.

Accounting firms and agencies participate in e-commerce and are recognized to handle and determine their client’s property tolls are compensated directly on time. E-commerce is known to lessen the client’s costs for processing and monitoring the payment of property tolls along with other settlements to make.

A tax service business offers its clients convenience given that they can enable them to save a lot of time, effort and cash. They licensed accountants experienced are outfitted with the proper type of mastery and knowledge the customer might not have known and in addition they provide the much-needed analysis and results within time.

One of the leading roles of the business will be mindful for delinquent property tolls and become mindful enough to alert the lender of possible liens against their mortgagor’s qualities and avoid it. You surely don’t want the financial institution to finish up becoming who owns these qualities.

These agencies handle tasks that many clients find hassling which are once the season comes for filing the returns. Most don’t have the persistence to set up and fill the forms along with other processes that should be done, so that they hire individuals who will children their hands and finish the procedure on their behalf.

Clients committed to e-commerce don’t have to hire additional staff to keep an eye on taxing authority, information or schedules, request or identify toll bills, or any other concerns regarding toll matters.

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Various Tax Providers

Each year, once the month of April comes, everyone’s in a rush to complete preparing their returns. While many people can handle planning and strategizing for his or her own returns, business leaders and folks with notable assets and reserves hire specialist help from tax providers. There are various kinds of homework services of these professionals planning returns for they. You will find registered agents, accountants and attorneys who make certain things are stored at its best form in handling returns for his or her client.

Professional Providers

You will find companies who choose well-known tax providers. Such groups operate to help place in order annual revisiting for any cost. More often than not, they cater refund advance loans. These frequently survive from coast to coast and therefore are staffed with expert auditors, accountants and financial analysts. They can also hire very promising non-professionals and accounting students, whom they train to build up skills for various finance reporting and analysis. However, it might be better to need a licensed preparer to make sure they are fully aware the basic principles of tax codes.


They are efficient and effective workers. Those are the most frequent professional providers. CPA’s possess the degree in accounting and will be accredited by their condition. They have to acquire annual education courses of instruction for re-certification.

While there are plenty of individuals thinking they simply organize returns, CPA’s really take control of monetary dealings, business and planning suggestions and proposals. The CPA does these recommendations throughout their full-time or part-time work, whichever they like. Getting a CPA is essential for bulky companies.

Finance Lawyers

While attorneys can appropriate themselves inside a different expertise, there are several who grow to be finance lawyers. There are numerous laws and regulations involving finance and tax that is one very useful sphere for such lawyers. Finance lawyers guide clients with issues regarding returns, tax refuge and drawing official procedures for communal tax and much more.

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How Do I Pick a Decent Tax Service In My Business?

Hunting for a Tax Service?

There are numerous methods to find tax service companies, and a few can also be present in the local phone book.

But where would you move from there? You will find loads of names listed but there needs to be a much better systematic method of selecting one right? The very first factor that you ought to choose may be the total degree of support that you’re going to want. Tax services sometimes do greater than assist you to file your return.

If you’re not proficient at organization and want help working out tax withholdings, or advanced services then you may want to consider the selection of options offered in the provider. You might want them handling all of the tax work of the organization or bookkeeping.

Bookkeepers tend to be less expensive than CPA’s for tax services, so if you don’t need one then you need to stay with a accountant for organizing and managing your financial if you don’t wish to manage this by yourself or perhaps in house.

The most crucial facets of selecting a great tax services are the credentials, references, and professional qualifications. And also the absolute most significant is if you think confident with the individual you’re dealing with, since it is within their welfare that the company performs too to enable them to help you stay like a client.

You have to develop trust using the person you’re dealing with and feel that you could count or rely on them to help you together with your strategic business plans. They are important when things fail for example improper filed tax statements, fines for getting to file for extensions. It’s to your advantage they have sufficient staffing to assist stop you from falling into this dilemma.

Tax season appears and when a specific tax services are overloaded it may effect what you can do to organize and submit these documents in due time. Most tax services go ahead and take role of the reliable consultant for your organization, and they’ve an ethical obligation for you to offer you seem tax information which you can use inside your business.

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