Dealing with unpaid back taxes can be a daunting experience, but understanding the process and options available can significantly reduce stress and financial strain. This step-by-step guide aims to help you navigate the complexities of resolving your IRS back taxes effectively.


Unpaid back taxes are taxes that have not been paid by the deadline. The Internal Revenue Service (IRS) is quite stringent about collecting taxes due, but they also offer several programs and solutions for taxpayers to resolve their debts. The key is to approach the situation proactively and with the right information.

Step 1: Understand Your Tax Debt

Before you can resolve your tax debt, you need to understand how much you owe and why. The IRS will send you a notice detailing your tax debt, including the principal amount, penalties, and interest accrued. Review this notice carefully. If you disagree with the amount, you have the right to ask for a detailed explanation or to dispute the debt.

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Step 2: File Any Unfiled Tax Returns

If you have unfiled returns, you must file them as soon as possible. Not filing can lead to higher penalties and limit your options for resolution. The IRS requires current tax compliance before negotiating any debt settlement or payment plan.

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Understanding IRS back taxes - Wasilidas & Kulik CPA PC

Step 3: Explore Your Payment Options

Once you have filed all necessary returns and know what you owe, explore your payment options. The IRS offers several ways to resolve unpaid taxes:

1. Full Payment:

If possible, the simplest way to resolve back taxes is by paying the full amount. This approach avoids additional interest and penalties.

2. Installment Agreement:

If you can’t pay in full, an installment agreement allows you to pay your debt over time. There are several types of installment agreements:

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3. Offer in Compromise (OIC):

An OIC allows you to settle your tax debt for less than the full amount if paying your full tax liability would cause financial hardship. This requires proving that you cannot pay the full amount now or through payment plans.

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4. Currently Not Collectible (CNC):

If you can show that paying your tax debt would prevent you from meeting basic living expenses, you can apply for CNC status, which pauses collections until your financial situation improves.

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Step 4: Communicate with the IRS

Communication is critical. If you’re unsure about the process or your options, speak directly with an IRS representative or hire a tax professional. Respond promptly to resolving IRS back taxes and keep records of all communications.

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Step 5: Avoid Future Tax Debt

Once you resolve your back taxes, ensure you stay compliant in the future:


Resolving IRS back taxes might seem overwhelming, but with the right approach and information, you can navigate the process and minimize the impact on your financial future. Remember, the worst thing to do is nothing; taking action promptly can save you money and stress in the long run.