It can be difficult and frustrating to hear specific tax terms that you don’t understand. If you owe back taxes to the federal government, then the notice you receive from the IRS may contain terms that you’ve never heard before. Before you can decide what to do about your tax problems, it is important to fully understand exactly what your options are and what the IRS is suggesting.
Five Common Terms You Need to Know if You Owe Taxes to the IRS
As you work toward resolving your outstanding back tax issues it is important to know the definitions of the following terms, which may mean one thing to you and another thing to the IRS. Accordingly, it is important to know the IRS definition of:
- Back Taxes: Taxes that were not paid when they were due.
- Currently Not Collectible: This status may be issued by the IRS after it receives evidence that a taxpayer does not have the ability to pay a tax debt. The statute of limitations continues to run while a tax debt is declared currently not collectible. However, the status is regularly reviewed to determine if the taxpayer can pay the debt and may not be a final resolution to a tax problem.
- Offer in Compromise: A program offered by the IRS to resolve outstanding tax problems. Generally, a taxpayer may offer a compromise agreement for less than the total amount of tax debt, interest, and penalties that are owed. Before a taxpayer can realize the benefits of the program, the IRS must accept the terms of the offer.
- Penalty for Failure to Pay: A financial consequence issued by the IRS for any portion of taxes that was not paid on time.
- Penalty for Failure to File: A financial consequence issued by the IRS for any tax returns that were supposed to be filed that were not filed on time.
Of course, there are other terms used by the IRS that are important to understand and you should contact an experienced Tulsa tax lawyer if you have any questions about the content of an IRS notice or about how to settle outstanding tax debt.
Call a Tulsa Tax Attorney if You Have Federal Tax Problems
If you are having problems with the IRS, then we encourage you to contact an experienced Oklahoma tax lawyer today to understand exactly what the IRS is talking about and what you can do about it. Our Oklahoma tax attorneys welcome your call at 800-721-7054 and invite you to read a FREE copy of our book, The Ultimate Survival Guide for IRS Problems, to learn more about what to do next.