You know you haven’t filed or paid taxes for one or more years, but do you know exactly how much you owe? Unfortunately, ignoring it doesn’t make it go away. Might as well bite the bullet now and get things figured out!
The IRS provides several ways to learn how much you owe them, even though they sent you mail telling you about your delinquent taxes. By the time you receive it (if you receive it at all), the amount may have grown in interest and penalties.
Oh, Those Crazy Back Taxes
Back taxes are what you didn't pay when you were supposed to. Every year, most people must pay income and other taxes; if they don't pay or underpay, they owe back taxes.
The back taxes or delinquent tax debt accumulates penalties and interest every month, making the debt bigger and bigger until you pay it off.
Why You Need to Know Your Exact Tax Debt
The IRS will issue a penalty if you don't pay your taxes on time, and you also receive a penalty for filing late. The remaining balance accrues interest if you don't pay your tax debt in full and haven't set up an installment plan or other way to pay it off.
It pays to be precise and accurate. Fortunately, the IRS has a handy-dandy online tool to help you with that.
The IRS Online Tax Debt Tool
Once you set up your secure account, you can see your tax liability for each tax year, including the principal amount, penalties, and interest. The tool also shows you any payments you made within the past 18 months and your payoff amount.
You can access any letters the IRS sent you, information about pending payments, the amount you owe by tax year, and economic impact payment information. Do you need a tax transcript? Use the online tool!
One downside to using the online tool is that it isn't available 24/7. Yep, even the government's computers have limited operating hours. And they are on Eastern Time.
The IRS online tool's hours of operation are:
- Monday through Friday, 6 AM to 12:30 AM (Saturday morning) ET
- Saturday, 6 AM to 10 PM ET
- Sunday 6 PM to 12 AM (Monday morning) ET
If you have an urgent need to see your tax information Sunday before the evening football game commences or in the middle of the night, you're out of luck.
Creating Your Online Account
For security reasons, the IRS asks all kinds of questions that it's in your best interest to answer completely and correctly. Before sitting down to open an account, make sure you know the following information:
- Your Social Security Number
- Your date of birth
- The filing status of the tax return in question (single, married filing jointly, etc.)
- The mailing address from your last tax return
- Your email address
- A mobile phone with your name on the account
- An account number in your name from a mortgage or home equity loan, car loan, or credit card
Once you set up your account, ensure the IRS has your correct and current address. Maybe they've been trying to contact you, but the mail is going to an old address. Unlike those supposed car warranty companies, the IRS will never call you using a robo-dialer and an automated voice messaging system.
To complete your account setup, the IRS does a "soft pull" of your credit report, which doesn't impact your credit rating.
What If You Don’t Have a Mobile Phone or Loan Number?
Hmmm. If you don't have either, you will have to go old-school and phone or mail the IRS. It's much less convenient, but still better than letting your tax debt grow.
To phone the IRS, be prepared to wait. Bring a book, watch a movie, or find some way to amuse yourself until someone picks up at the other end. Calling as early in the morning as possible might get a quicker response.
Like the online tool, the call center has operating hours. It is open Monday through Friday from 7 AM to 7 PM.
- Individual taxpayers should call 800-829-1040.
- Business taxpayers should call 800-829-4933.
Be prepared with all your information. You need:
- Social Security numbers (SSN) and birth dates
- Individual Taxpayer Identification Number (ITIN) for taxpayers without a Social Security number
- Filing status – single, head of household, married filing joint, or married filing separately
- Prior-year tax return
- Tax return you’re calling about
- Any correspondence the IRS sent to you
If you decide to use the US Postal Service, you can only learn your primary tax liability. You will not get your interest or penalty amounts assessed since the IRS sent you a response. Also, the IRS only sends notices for a single tax year. If you owe money for multiple years, you will probably need to obtain notices for all years and add up all the balances.
Where can you get current information? Online or by phone.
You need a lot of documentation to start paying off your tax debt:
- All your returns from the years you didn’t pay
- All the supporting documents and forms for each return
- A copy of any missing returns from your tax preparer or the IRS
Once you are ready to determine your tax liability, be sure to use the tax form for the appropriate year. If you owe taxes for tax year 2020, don't use the forms provided for 2022. Tax law changes all the time, and you need the correct documents.
You can access older forms online through tax preparation software or searching for each form on the IRS website. Be aware that you may need to print out the older forms and fill them out manually.
Once you have your balance, calculate your late filing, payment penalties, and the interest on the balance due.
Finally, pay your taxes in full any way you can. Interest and penalties continue until you do.
We get it; straightening out your tax debt can be daunting. Top Tax Defenders is ready to help you out of your tax jams. Contact us if you don't know how much you owe the IRS and feel overwhelmed by doing it yourself. We can help you find all your paperwork and forms, contact the IRS, and set up a payment plan if needed.
Don’t wait for the interest to pile up any higher.