Back Taxes Guides

Are Back Taxes Ever Forgiven? Understanding the Details

When you owe taxes to the IRS from past years, it can feel like a dark cloud following you around. Rather than opening the mailbox with dread every day and waiting for a collection letter from the IRS to arrive, it’s better to be proactive. Are back taxes ever forgiven? The IRS offers some forgiveness programs that may lower your tax bill, but you must take the first steps.

Understanding Tax Debt Forgiveness Options

If you cannot pay the back taxes you owe, one of your best options is to explore back tax relief options. Your tax forgiveness eligibility depends on multiple criteria. You usually must show severe financial hardship as part of the tax debt forgiveness criteria to qualify.

Understand that these programs will almost certainly not wipe out your entire tax bill. However, they can give you options for potentially paying less than you owe, as long as you understand the nuances of using them.

Offer in Compromise

When wondering whether the IRS ever forgives back taxes, the offer in compromise (OIC) program is one possibility. With an OIC, you can send the IRS a lump sum payment for a portion of the total balance, and the IRS forgives the remainder.

Being eligible for OIC requires meeting some strict criteria. The IRS wants to see proof that you will have no chance of paying the tax debt in full because of limited income possibilities and assets.

You also must promise to pay all future tax bills on time to qualify for OIC. If you fail to meet future tax obligations, the IRS could void the OIC and seek to collect the original amount.

Try Negotiating a Settlement

You may be able to negotiate with the IRS to receive a reduction or forgiveness of the past tax amounts you owe. This is an option you rarely can complete successfully on your own. Instead, you almost certainly will need the help of a tax resolution firm like ours.

During negotiations, the resolution firm completes the necessary forms and corresponds with the IRS on your behalf. We may be able to find evidence of financial hardship that allows you to qualify for partial or complete tax forgiveness. 

In most cases, you must have a tax bill of $10,000 or more to be eligible for this type of help to try to get out of tax trouble

Even if the tax resolution firm cannot convince the IRS to completely or partially forgive your back taxes, you may receive a reduction in penalties and interest on the bill.

Disputing Your Tax Bill 

When wondering whether back taxes are ever forgiven, people often fail to consider that the IRS occasionally makes mistakes. It’s possible you don’t need tax debt forgiveness because you don’t owe the IRS anything. 

Certainly, such errors are rare, but they do happen. With the help of a tax resolution firm, you may be able to dispute the charges and resolve the situation without having to pay the IRS anything in a back tax settlement.

Are Back Taxes Ever Forgiven? Let Us Help

If you owe taxes from past years, don’t just ignore the problem and hope it goes away. Tax forgiveness programs are available, but they can be difficult for you to navigate on your own. At Levy & Associates, we have several solutions to settle back taxes that we can help you attempt to implement. Let us examine your situation to determine whether your back taxes can be forgiven. To discuss your options when you owe back taxes, call us today at 800-TAX-LEVY or contact us online.

Contact Levy & Associates for Dependable Tax Audit Services

Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.

There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.