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If someone is not 100% sure how much he or she owes the IRS, then it might be a good idea to talk to a professional accountant. An accountant can help a person evaluate how much money is owed and give an individual good guidance on how to handle future tax returns. As soon as someone understands how much is owed, they might make a repayment plan. There are numerous ways to go about paying back taxes. The IRS provides free forms for people who owe back taxes and these may be found via the IRS website. The perfect option would be to pay the back tax bill in one shot, as that way one will not accumulate late payment fees and amplified interest rates. However, not everybody is capable to pay a back tax bill right away, particularly if they does not have much money in savings and/or the bill is extremely large. A person who cannot pay the back tax bill instantly should contact the IRS and work out either an installment agreement or compromise agreement. If the IRS agrees to an installment agreement, then you would be able to pay back a small portion of the money owed every month. However, a person who works out this kind of arrangement with the Internal revenue service would need to make sure to pay the whole amount due on time, as there can be negative consequences for not doing so. A compromise agreement is much harder to find than an installment agreement. In a compromise agreement, the Internal revenue service agrees to give up some of the money it is due and someone only has to pay a portion of his or her back taxes. You should only request for such an agreement if there are no chances of ever being able to pay back the complete amount that is owed. The IRS will only consider such an option if it is not fully obvious how much is owed in back taxes or if the person is looking at brutal economic problems. It is vital to pay back any back taxes owed immediately. Preferrably, you should pay the whole amount they owes each year. Fortunately, an individual who has made an error and owes back taxes can pay back these without having to go up against severe penalties. One should consult with a CPA and pick a back tax repayment process that is financially feasible and satisfying to the Internal revenue service.
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