Back taxes are not going away. There is a time limit given for the IRS to collect on back taxes but it is not a good idea to test that limit. It is better to deal with back taxes as soon as you learn about those tax debts. The best method is to avoid tax debts altogether by staying away from the common mistakes that cause many people to owe back taxes in the first place.
Getting into Trouble
Filing mistake it is not unusually for people to get into tax trouble when they attempt to file taxes on their own. The tax code is so difficult that even the tax experts – the ones in charge – often have trouble deciphering the code. Mistakes can lead to tax debt in the form of back taxes.
Living beyond the law there are those that believe they can and even should avoid paying taxes. It may work for a while but eventually the deception will catch up and there will be a tax debt in the form of back taxes that could lead to potential jail time.
Lack of funds – some people may want to pay taxes at the time they are due but run into financial problems that make payment impossible. They put other bills as the priority and taxes fall to the bottom of the list. Taxes that are not paid on time for any reason will result in back taxes, penalty fees and other possible expenses.
No planning Tight financial times causes many people to live in the present and not plan well for tomorrow. Some people (especially those that are self employed or small business owners) forget to put aside enough money to pay taxes at the end of the year – or by the quarter – and then find that they owe what they can’t pay.
There are so many ways to get into tax trouble that is often best to consult with a tax professional to help you work your way through the massive codes and rules that govern taxes.