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Back Tax Resolution | Tax Problems | Flat Fee Tax Service

Updated: Nov 22, 2019

Although most people pay their taxes on time every year, there are many people have obstacles that lead to a need for back tax resolution in the future. Back tax resolution is the settlement of past-due tax debt with the IRS. In other words, you can resolve your balance with the IRS by establishing a payment agreement. Keep reading to learn more about how it works.

The First Step in Back Tax Resolution: Unfiled Tax Returns - Filing Returns

The IRS is commonly relentless in penalties and interest for unfiled tax returns.

Although they often make exceptions in extraordinary circumstances, they are diligent in following the law of the tax code. This is especially true for filings and payments.

In fact, they assess penalties on delinquent taxpayers immediately after the deadline. They don’t allow for a grace period and they don’t send late notices before assessing these penalties.

What’s more, IRS tax penalties are often steep and compounding interest adds up quickly. This makes paying the debt even more difficult. To demonstrate, we’ll discuss each of these penalties, and how the IRS applies them to your balance.

Failure to File Penalty

The IRS explains the failure to file penalty saying, “The penalty for filing late is normally five percent of the unpaid taxes for each month or part of a month that a tax return is late.” Taxpayers can minimize the penalty by paying as much of the tax balance as possible when they file.

However, you can save more money by filing on time with no payment than waiting to file until you can pay. This is because the failure to file penalty is generally more expensive than the failure to pay penalty. Read more on the failure to pay penalty in the next section.

Failing to file your tax return may result in two different outcomes. The IRS assesses a monetary penalty, as explained above, or jail time. The IRS chiefly uses jail time in cases of evasion. According to the IRS, “There’s no penalty for failure to file if you’re due a refund. However, you risk losing a refund altogether if you file a return or otherwise claim a refund after the statute of limitations has expired.”

Additionally, if the taxpayer requests a filing extension and has paid at least 90 percent of their tax liability at the time of the request, the IRS will forego the penalty. However, the taxpayer must pay the full balance by the extended deadline.

Although the failure to file penalty compounds the later you file your return, the IRS caps it at 25 percent. In other words, the IRS says, this penalty won’t exceed 25 percent of your unpaid taxes. But we understand this doesn’t provide much comfort to the struggling taxpayer.

Accordingly, the taxpayer's first step toward back tax resolution is to file missing tax returns as soon as possible. Back Tax Resolution with the Fresh Start Initiative

The Fresh Start Initiative is a collection of tax debt relief programs designed to help taxpayers. It includes the following programs.

IRS Installment Agreement - The IRS established 798,403 installment agreements in 2017. A taxpayer with an installment agreement can pay off their debt in equal, monthly payments. Taxpayers use this part of the Fresh Start Initiative most.

Offer in Compromise - The Offer in Compromise (#IRStaxsettlement), on the other hand, is the least used program. It allows the taxpayer to settle their debt for less than they owe. Although it’s highly sought after, it’s the most difficult to qualify for.

Penalty Abatement - Many taxpayers qualify for a penalty abatement. This program removes or reduces some of the penalties incurred, especially if the penalty is your first.

Partial Pay Installment Agreement - These unique installment agreements combine the benefits of an installment agreement and an offer in compromise. Essentially, taxpayers make payments on their debt for a set period of time. Regardless of the remaining balance at the end of the term, the taxpayer’s case is settled. The IRS doesn't require payment on the back-tax debt.

I am Dave Rosa. I will be providing you with your comprehensive and free consultation. A consultation will take about 20 to 30 minutes. There is no obligation on your part to engage Flat Fee Tax Service to work on your back tax resolution.

Why Flat Fee Tax Service for Back Tax Resolution?

Experts recommend hiring professional tax help when you need to resolve back tax debt with the IRS. With over a decade of experience and an A+ rating at the Better Business Bureau, Flat Fee Tax Service is a highly qualified, reputable choice for trusted tax relief services.

Give us a call at 866-747-7435 for your free consultation. We’re available for our clients every day of the week during standard business hours, as well as in the evening.

Call us today and you’ll certainly sleep better tonight.




[1] Eight Facts on Late Filing and Late Payment Penalties. (2019, July 17). Retrieved from //www.irs.gov/newsroom/eight-facts-on-late-filing-and-late-payment-penalties

[2] Filing Past Due Tax Returns. (2019, February 22). Retrieved from //www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns

[3] Forms & Instructions: Internal Revenue Service. (2019, May 1). Retrieved from //www.irs.gov/forms-instructions

[4] Topic No. 153 What to Do if You Haven't Filed Your Tax Return. (2019, August 1). Retrieved from //www.irs.gov/taxtopics/tc153

[5] Transcript Types and Ways to Order Them. (2019, March 4). Retrieved from //www.irs.gov/individuals/tax-return-transcript-types-and-ways-to-order-them

[6] Understanding Penalties and Interest: Internal Revenue Service. (2019, May 30). Retrieved from //www.irs.gov/businesses/small-businesses-self-employed/understanding-penalties-and-interest


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