Help With State Back Taxes
State back taxes occur when you fail to pay taxes when they are due. You can incur back taxes on any type of tax, including business taxes and property taxes. Failing to make arrangements to pay the debt may result in the state placing a lien on your business or property. If you owe state back taxes, you can get help on paying those levies.
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State Revenue Departments
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State revenue departments handle billing and collection of state taxes, including back taxes. The department will send a notification letter about any back tax issues it finds. Depending on the severity of the situation, it can also levy fines, liens and criminal charges.
To get help with your back taxes, you can contact your state revenue department. Find out who handles back taxes and contact that individual to discuss the situation. The person can help you know what your next step is and can answer any tax questions you might have about the situation.
Professionals
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Aside from getting help from your local revenue department, you can also contact a professional in the field. Certified public accountants (CPAs) and tax attorneys can help you determine what you owe and how to proceed. These professionals may have negotiation skills better than yours, a skill that can come in handy when you're trying to reduce the amount you owe.
You may also need help getting documents together in order to work with your state department. In some cases, these professionals can help you. According to BackTaxesHelp.com, a tax company, you may need information documenting expenses you used as deductions, W-4s and 1099s for the years you didn't report or pay taxes. (See Reference 2.)
Incentives
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Some states offer disclosure programs designed to encourage you to admit to the problem before the revenue department has time to identify it. Often these programs reduce the penalties involved with back taxes as an incentive to get you to resolve the debt. The incentives vary by state but can also include waiving any criminal charges for violating tax laws.
Misconceptions
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Trying to avoid the debt all together won't make it go away. The longer you delay in making arrangements, the more difficult it might be to resolve the tax issue. While you may think it's a good idea to contact your local state revenue department once you begin making more money, there may be some benefit to contact revenue officials while you're broke. According to certified public accountant John Meadows, interviewed in "BusinessWeek" magazine, state revenue departments may forgive part of the debt and may be more willing to work out payment options with individuals experiencing financial difficulty. (See Reference 1.)
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