No matter how much you owe or how many years you’re behind, getting help before the IRS escalates is in your best interest.
Back Taxes Help: Resolve What You Owe the IRS
Back taxes are unpaid taxes from a prior year, and they don’t go away on their own. Interest and penalties compound monthly, and a balance that once looked manageable can grow into something that threatens your paycheck, your home, and your business.
The good news: no back tax situation is too far gone! Whether you’re facing years of unfiled tax returns, an inherited tax liability, or a business behind on payroll taxes, professional help with back taxes dramatically improves what you walk away with. At Lothamer Tax Resolution, our acceptance rate for IRS Offers in Compromise exceeds 90% — roughly three times the rate for taxpayers who file without representation.
If you owe the IRS a sizable debt, getting help can mean the difference between keeping and losing your paycheck, your home, and your business.
What Happens If You Leave Unpaid Taxes Alone
The IRS has collection powers that no private creditor has, and it doesn’t need a court order to use most of them. Left unaddressed, an unpaid balance typically escalates in this order:
- Penalties and interest accrue. Failure-to-file and failure-to-pay penalties run monthly, and interest compounds daily on the total — including on the penalties themselves.
- Notices escalate. Early letters are informational. Later ones, like a Final Notice of Intent to Levy, start a clock measured in days.
- A federal tax lien attaches. A lien secures the government’s claim against your real estate, vehicles, and business assets, and complicates any sale or refinance.
- Wages and bank accounts are levied. The IRS can garnish a portion of every paycheck and freeze bank funds without suing you first.
- Refunds are withheld. Future refunds are applied to the older balance until it’s paid.
A note most taxpayers don’t hear in time: refunds expire. You generally have three years from the original due date to claim a refund on an unfiled return. File later than that and the money is gone permanently, even though any balance you owe remains collectible.
How to File Back Taxes and Get Current
Filing is the first step in nearly every resolution. The IRS will not approve an Offer in Compromise, an installment agreement, or most other relief while returns are missing. Getting into compliance is what unlocks your options.
The back tax filing process
- Pull your IRS transcripts. Wage and income transcripts show what was reported to the IRS under your Social Security number, which reconstructs most of a missing return even with no paperwork of your own.
- Identify which years must be filed. The IRS generally requires the last six years of returns to be considered current, though your facts can change that.
- Rebuild the records. We’ve worked from shoeboxes of loose receipts and from clients with no documents at all. Missing records are a solvable problem, not a disqualifying one.
- Prepare and file the returns. Accurate returns often reduce a balance the IRS assessed on its own — see below.
- Address the remaining balance. Once the filings are in, the relief options in the next section become available.
If the IRS already filed for you
When you don’t file, the IRS may prepare a Substitute for Return on your behalf. It uses reported income with no deductions, no credits, and the least favorable filing status — so the assessed balance is almost always higher than what you actually owe. Filing an accurate original tax return to replace it frequently reduces the liability outright.
Back Tax Relief Options and Installment Agreement
The IRS’s goal is to collect what’s owed and bring taxpayers back into compliance. If you owe taxes, you have several options, and some taxpayers can request up to 180 days to pay the full amount before moving into a longer-term IRS payment plan. These are the programs that exist because of that — which one fits depends entirely on your income, assets, and circumstances.
| Option | What it does | Best suited to |
| Offer in Compromise | May settle IRS tax debt for less than the full balance; few taxpayers qualify, and applications can be rejected if they do not meet IRS standards | Taxpayers whose assets and income can’t realistically cover what’s owed |
| Installment Agreement | Functions as a payment plan with monthly payments over a longer period for qualifying debts | Taxpayers with steady income but no lump sum available |
| Currently Not Collectible | Temporarily delays collection actions when proven financial hardship exists | Taxpayers in genuine financial hardship |
| Penalty Abatement | Removes penalties for reasonable cause, or first-time relief for a clean compliance history | Anyone whose penalties make up a large share of the balance |
| Innocent Spouse Relief | Separates you from a spouse’s or former spouse’s tax debt | Taxpayers assessed for a joint return they didn’t cause |
| Return Filing Assistance | Files missing or amended returns to restore compliance | Anyone with unfiled years |
Penalties and interest often make up a substantial portion of a total balance, which makes abatement worth evaluating in nearly every case — including alongside another resolution.
How a Licensed Tax Professional Delivers IRS Back Taxes Help
Lothamer represents clients before the IRS and state tax agencies through licensed Enrolled Agents, CPAs, and tax attorneys. Representation matters for a practical reason: a licensed representative can request a hold on collections, obtain your full transcripts, and negotiate directly with the Service — none of which you can delegate to an unlicensed preparer.
We’ve reversed audits, challenged fraudulent 1099s, corrected filing statuses assigned in error, and stopped active garnishments and levies. We handle state tax debt alongside federal matters so both agencies are worked under one strategy rather than in isolation.
Within the first 24–72 hours, we can do more than most firms accomplish in weeks.
Step
1
Call our office
For a reasonable fee, we contact the Internal Revenue Service to request a stay on collection, obtain your transcripts showing unfiled years, your account status, balances due, and income reported under your name, and schedule your consultation within three days with a licensed professional or Enrolled Agent.
Step
2
Meet with a licensed professional
Your consultation is a virtual meeting through our proprietary conferencing software, held from your home, office, or vehicle. You’ll review our findings, discuss your options, and receive a written plan to resolve the problem — along with an estimated cost to carry it out.
Step
3
We implement the plan
Once you accept the service agreement, we go to work immediately. You’ll be set up in our eResolution Client Portal with visibility into deadlines, next steps, and case progress.
DID YOU KNOW: Why Self-Employed Taxpayers Fall Behind Most Often
Most tax problems we see belong to self-employed people who are excellent at their trade but were never advised on how to structure the business or pay in. The common advice — form a single-member LLC and pay quarterly estimates — is one of the worst systems for staying current, because it bills you in arrears on profit rather than on cash as it arrives. There are methods that pay your taxes automatically based on cash flow instead. If you’ve fallen behind more than once, the structure is usually the reason.
It Pays To Get Current!
Frequently Asked Questions About Back Taxes
Back taxes are taxes from a previous year that remain unpaid, whether because a return was filed without payment or because the return was never filed at all. If you owe back taxes, the IRS also accepts debit or credit card payments as one way to pay. Penalties and interest continue to accrue on the balance until it is resolved.
The IRS generally requires the last six years of returns to consider you compliant and eligible for relief programs, though the specific years required depend on your circumstances and on what the IRS has already assessed.
Yes. Unfiled returns are one of the most common situations we handle. We pull your IRS transcripts to reconstruct the missing years, file the returns, and then work with the IRS to resolve the remaining balance once you’re current.
The IRS evaluates your income, necessary living expenses, and equity in assets to determine what it could realistically collect. If that amount is less than your balance, you may qualify. A licensed tax professional can assess your eligibility before you apply and prepare the offer the way the IRS expects to see it.
The IRS can garnish wages, levy bank accounts, and in rare cases seize property when back taxes go unresolved. Wage garnishment and bank levies are far more common than home seizure, which requires court approval. Acting before a Final Notice of Intent to Levy expires is the most reliable way to prevent enforcement.
Penalty abatement is available in two forms: reasonable cause relief for circumstances like serious illness, a death in the family, a natural disaster, or destroyed records, and first-time abatement for taxpayers with an otherwise clean compliance history. Interest tied to abated penalties is generally removed along with them.
You generally have three years from the original due date to claim a refund on a late-filed return. After that window closes, the refund is forfeited, but any balance you owe for that year remains collectible.
Yes. We handle state tax debt and compliance alongside IRS matters, coordinating both under a single strategy so a state agency doesn’t pursue collection while a federal resolution is pending.
The Sooner You Start, the More Options You Have
Every month a back tax balance sits unaddressed, penalties grow, and enforcement moves closer. If you owe back taxes or face a growing tax debt, a free, confidential consultation shows whether an IRS payment plan or another relief path fits your case.