Here are five serious mistakes for taxpayers to avoid when it comes to back tax: 

Mistake No. 1: Delaying to Act

A lot of taxpayers think if they ignore the IRS, the IRS will move on. In fact, the longer you delay, the more serious your situation will become and the more fines and penalties you will incur. The IRS has the power to issue bank levies and garnish your wages if you do not make an attempt to resolve the situation.

Mistake No. 2: Not Knowing Your Rights as a Taxpayer

The IRS can be intimidating and difficult to work with. However, you have the right to be treated with professionalism and courtesy, the right to privacy, and the right to pay only the amount that you actually owe. You also have the right to seek professional representation, such as help from an Enrolled Agent, CPA, or tax attorney. If you disagree with the outcome of your case or proposed action by the IRS, you can appeal within a certain timeframe.

Mistake No. 3: Paying Off Your Tax Bill on A High-Interest Credit Card

You may be worried about penalties and fees if you do not pay the IRS back in full. Yes, they charge penalties and interest, but it may be less than the high interest rates of most credit cards. If you can reach a favorable payment agreement, you’re better off paying the IRS instead of a high-interest credit card.

Mistake No. 4: Failing to Document Everything

It’s imperative that you keep copies of any and all correspondence and documentation to and from the IRS. Make notes of all interactions, including telephone conversations. Always ask for the full name of the person you were speaking to as well as their direct phone number and badge ID number. Keep a record for your files, as you never know when you will need it. And always make sure to get any agreement with the IRS in writing.


Mistake No. 5: Failing to Seek Assistance from a Tax Relief Professional

If you owe back taxes to the IRS and you cannot fully pay within 30 days, get professional help from a qualified tax relief specialist. The laws are constantly changing, so what may have worked last time might no longer be applicable. There are so many variables and making simple errors while trying to navigate tax law and IRS rules yourself could result in unnecessary enforcement action by the IRS, additional fees and penalties, and paying more to the IRS than you have to.


Have an IRS issue? Start with helpful FREE guidance at LandmarkTaxGroup.com/Free or call us at (949) 260-4770.

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