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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4026
Experience:  35 years tax experience, including four years at a Big 4 firm.
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What to expect when i owe lots of back taxes

Customer Question

what to expect when i owe lots of back taxes
Submitted: 5 months ago.
Category: Tax
Expert:  Mark Anderson replied 5 months ago.

You can expect the IRS to pursue collection.

Expert:  Mark Anderson replied 5 months ago.

You might want to contact the IRS to set up some type of payment plan.

Expert:  Mark Anderson replied 5 months ago.

Customer: replied 5 months ago.
Hello, I was wondering more about the process of what happens. One thing i am concerned with is that we filed all our 941 back in 2009 and basically havent heard much more. i dont know if i should "rock the boat" or wait till closer to statute expiration? i know its hard to give any advice without all the specifics but i am just wondering what the process would be.
Expert:  Mark Anderson replied 5 months ago.

I don't know. I can opt out. Maybe another expert can answer.

Customer: replied 5 months ago.
Ok thank you.
Expert:  PDtax replied 5 months ago.

Hi from Just Answer. I'mCustomer I can assist since the last expert opted out.

The best thing to do is make sure the returns were received by IRS, and taxes assessed. You used to be able to get your transcripts immediately, at Now, you can still ask for them online, but they are mailed to you.

Then, you confirm the CSED (collection statute expiration date) to see how long IRS has to collect.

You might also confirm who is the taxpayer who owes the 941 taxes (you or your business). If you had a corporation, it owes the taxes, and you might have been personally charged a trust fund recovery penalty (TFRP). If you were self employed, then the taxes are all yours.

If the transcript shows the 941 forms filed, and taxes assessed, that you consider your options:

1. Let the collection statute expire, likely in 2019.

2. Consider your current income and expenses, to see if you are a candidate for uncollectible status ("53 or "530"" in IRS code). If so, IRS will not pursue collection, and the taxes might expire.

3. An installment agreement might be needed, based on your ability to pay, and the payments could get you to the CSED, when the taxes would no longer be collectible

4. You might negotiate a settlement with IRS via an Offer in Compromise.

This is not a scenario that you should undertake on your own. An experienced tax pro will be worth their fee if IRS does indeed want to pursue collection.

Thanks for asking at Just Answer. Positive feedback rating my assistance is appreciated. I'mCustomer

Customer: replied 5 months ago.
I worry a little about waking the giant by requesting the transcripts. Don't get me wrong I have not moved or hid from them. But I have two little kids and don't know what I would do if we lost our house or things like that.
Expert:  PDtax replied 5 months ago.

Been there too. I suggest you hire a tax pro who can request the transcripts directly from IRS. Their Practitioner Priority Line (1-***-***-****) will give the tax pro the transcripts, and, from experience, I can tell you they don't normally ask why transcripts are needed. That number is ***** for taxpayers, but only for tax pros to call.

Your inquiry, either on your own or through a pro, won't "wake the sleeping dog".

Customer: replied 5 months ago.
Is it possible that they put me under CNc without letting me know? And in your experience does the amount dictate the penalty?
Expert:  PDtax replied 5 months ago.
It is possible you might be CNC without negotiations. The amount does not dictate the penalty.
Expert:  PDtax replied 5 months ago.

Hi again.Customerhere.

If I have addressed your concerns, please rate my assistance to close out your inquiry. Positive feedback is appreciated. I'mCustomer