How to Find Out How Much You Owe in IRS Back Taxes
Do I owe the IRS? Outstanding taxes that you haven’t paid from previous years are known as back taxes. Find out how to check if you owe back taxes by reviewing IRS notices, your tax returns, or your online IRS account. Learn how to avoid penalties, resolve your tax issues, and explore payment options like installment plans.
Key Takeaways
- Back taxes are taxes that you owe but haven’t paid. The IRS can tack on interest and penalties, increasing the total amount owed over time. Ignoring back taxes can lead to serious legal consequences, such as wage garnishment, asset liens, and even criminal charges.
- Methods for determining if you owe back taxes include checking for IRS notices in the mail, reviewing past tax returns for errors or omissions, accessing your IRS online account, calling the IRS, and consulting with a tax professional.
- If you owe back taxes, recommended steps include obtaining copies of relevant tax returns, filing any missing returns using the correct forms for the tax year in question, calculating any additional interest and penalties, and arranging for payment of the taxes owed.
- Numerous payment methods are available for people who owe back taxes, such as making payments on the IRS website, through credit or debit card processors, on the IRS2Go mobile app, or on the Electronic Federal Tax Payment System. If full payment can't be made immediately, payment plans, Offers in Compromise, and requests to delay collection activities are possible alternatives.
What are back taxes?
Back taxes are taxes that weren’t paid when they were originally due. This can happen for a variety of reasons, such as the failure to file a tax return, underreporting income, or claiming incorrect deductions.
Interest and penalties may be added to back taxes over time. As a result, in some cases, the ultimate amount owed can be significantly higher than the original tax due.
If you owe federal back taxes, you’ll eventually have to pay them to the IRS, typically through some sort of payment plan or by making a lump-sum payment. Failure to pay back taxes can also result in legal consequences, including wage garnishment, liens on assets, or even criminal charges.
How to know if you owe back taxes to the IRS
Do you owe back taxes to the IRS and don’t even know about it? If you think you might, here are some things you can do to find out:
Check your mailbox. The IRS typically sends notices or letters through the mail to people who owe back taxes. Look for any official correspondence from the IRS indicating a balance due. If you do get an official letter or notice from the IRS, don’t ignore it.
TurboTax Tip:
Be extremely careful if someone claiming to be with the IRS reaches out to you via email, text message, or social media – it could be a tax scam. According to the IRS, they don’t initiate contact with taxpayers through these means to request personal or financial information, and they won’t demand immediate payment. Criminals can mail phony letters, too. If you think you’ve been contacted by a scammer, report it to the Treasury Inspector General for Tax Administration online or by phone at 800-366-4484.
Review your tax returns. Double-check your past tax returns to ensure they were filed correctly and that all taxes owed were paid. Common errors or unreported income could result in a tax liability.
Access your IRS account online. You can log into your IRS account to check your tax account balance, view tax records, and see any amounts owed for previous years. If you don’t already have an account, you can set one up on the IRS website.
Call the IRS. You can contact the IRS directly at 800-829-1040 to ask about any back taxes you may owe. Have your Social Security number and any relevant tax documents ready when you call, such as your prior-year tax return, tax returns you’re calling about, and any correspondence the IRS sent to you.
Consult a tax professional. If you're unsure about your tax situation or need help resolving a tax issue, consider consulting a tax professional, such as a certified public accountant (CPA), who can provide guidance and assistance.
Steps to take if you owe back taxes
Once you determine that you owe the IRS back taxes, what do you do then? You’ll need to calculate how much you owe the IRS – including penalties and interest. And, of course, you’ll ultimately have to pay off your tax debt.
To get that done, here are a few suggested steps you can take:
Step 1: Obtain copies of all tax returns that you still owe taxes on
The first thing you'll need to do is gather all of your relevant returns and tax records that relate to each year for which you owe back taxes. Each of your tax returns will report the amount of tax you owe, but never paid. If you did file a return but no longer have a copy, you can obtain one from the accountant who prepared it for you or, if necessary, you can order a duplicate copy from the IRS using Form 4506. If you can’t wait for a copy of your return or don’t want to pay the fee, try ordering a tax transcript instead.
Step 2: File your past-due tax returns
If you think you owe back taxes for tax returns you haven't filed yet, you can calculate the amount of tax you owe for each year by preparing the actual returns. However, when you do, make sure you use tax forms for the correct tax year.
For example, if you decide to prepare your tax return for the 2021 tax year in 2024, you must use 2021 tax forms, schedules, and instructions – not 2024 forms. If you mistakenly file using forms for a different tax year, the IRS will likely notify you of the error.
Accessing old forms is not as difficult as you may think. The easiest option is to use tax preparation software, such as TurboTax. TurboTax provides you with access to many of the IRS forms from prior years. Alternatively, you can search for each form you need on the IRS website. However, with older forms on the IRS website, you might have to print them out and fill them in by hand.
Step 3: Calculate your interest and penalties
Regardless of whether you filed the tax return years ago or are preparing it for the first time this year, your tax bill will go up once the IRS imposes interest and penalties for paying your taxes late. Calculating your penalties and interest up front will provide you with a more accurate estimate of what you’ll ultimately need to pay (although the IRS will tell you how much you owe in penalties and interest if you pay your tax bill first).
For example, if you file your tax return five months or more after the original due date, you generally should expect your tax bill to increase by 25% to account for failure to pay penalties (assuming you don’t qualify for IRS penalty relief). You’ll also have to pay interest on the unpaid balance.
Step 4: Pay your back taxes
Once you determine how much you owe the IRS, it's in your best interest to pay the amount in full or make payment arrangements immediately (more on payment options in a minute). Otherwise, at a minimum, your outstanding back tax balance will continue to accrue interest each month it remains unpaid.
How long does the IRS have to collect back taxes?
The IRS generally has three years to assess income taxes. The clock starts ticking on the date your tax return is due (including extensions), or the date the IRS received your return if it was filed late.
Once the tax is assessed, the IRS typically has 10 years to collect it (and related penalties and interest). However, this time period can be suspended or extended in certain circumstances, such as if you:
- request an installment agreement
- file for bankruptcy
- file an offer in compromise
- request a collection due process hearing
- request for innocent spouse relief
- serve in the military (including in a combat zone)
- live outside the U.S.
During the active collection period, the IRS can place a lien on your property and even take your house, car, wages, tax refunds, bank accounts, Social Security benefits, retirement income, or other property to cover your tax debt.
How to pay your back taxes
Obviously, you don’t want the IRS coming after your property – and the IRS doesn’t want it to go that far, either. That’s why they offer a wide variety of payment options.
Whether you’re paying off your tax bill all at once or need to pay over time, there’s likely a payment method that works for you.
Paying in full now
Usually, if you can, the best thing to do is pay your federal back taxes all at once. That way, penalties and interest won’t continue to be piled on to your tax bill.
If you’re making a lump-sum payment, you can always mail a check or money order to the IRS. You can even pay in cash at certain stores (you have to pay a small fee). But it’s probably easier for most people to make an electronic payment using one of the following methods:
Online IRS account. You can pay back taxes through your IRS account. Again, you can set up an account on the IRS website.
IRS Direct Pay. This IRS payment system accessible from the IRS website is free and available 24/7. You can even schedule payments up to 30 days in advance.
Credit or debit card. If you want to use a credit or debit card to pay back taxes, you can do that by phone or online through one of the IRS-approved payment processors. The IRS won’t charge you a fee, but the card processor will.
IRS2Go app. If you want to pay your tax bill on a mobile device, there’s an app for that. You can access the IRS Direct Pay system or pay taxes through a credit or debit card processor using the IRS2Go app.
Electronic Federal Tax Payment System (EFTPS). You can also pay back taxes through the Electronic Federal Tax Payment System. This is a free service offered by the U.S. Treasury Department that’s available by phone or online at any time. However, you have to enroll before you can make a payment.
Paying over time or delaying payment
The IRS understands that you might not be able to pay all your federal back taxes at once – or at least not now. If you’re in that situation, here are a few options to consider:
Payment plans. With an IRS payment plan, also known as an installment agreement, you agree to pay back taxes, interest, and penalties over time. Interest and penalties will continue to apply during the payment period, but the IRS won’t take more drastic collection procedures if you continue to make agreed-upon payments. You can apply for a payment plan:
- online
- by phone (call the number on your bill or 800-829-1040)
- by mail (complete Form 9465)
- in person at your local IRS office
Offers in Compromise. You can ask the IRS to settle an unpaid tax bill for less than the full amount you owe by submitting an Offer in Compromise (OIC). To apply for an OIC, most people have to file Forms 656 and 433-A, which require detailed information about your finances. You’ll also have to provide a minimum offer amount, choose between a lump-sum payment or periodic payments, and explain why you’re requesting the OIC. The IRS will generally accept an OIC if either:
- it agrees that your tax debt may not be accurate
- you don’t have enough assets or income to pay the amount due
- paying the amount due would either cause you an economic hardship or be unjust
Delay collection. If you can't pay any of the back taxes you owe because doing so would make it hard for you to cover basic living expenses, you can ask the IRS to delay collection activities until you can pay. Before the IRS approves such a request, you might have to show proof of your financial situation (and provide updated financial information during any delay). If the IRS agrees to wait, penalties and interest will still be applied until you pay the full amount. To request a temporary delay of the collection process, call the IRS at the phone number on your tax bill or 800-829-1040.
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