Frequently Asked IRS Tax Questions
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IRS Tax FAQs

1. How can I enroll in an IRS payment plan?

The first step to enroll in an IRS payment plan is to apply online for a plan or installment agreement. The IRS will generally allow you to set up a streamline payment plan if you owe less than $50,000.

2. What are the IRS payment plans available?

The short-term payment plan is for taxpayers who can pay off their debt in 120 days or less. The long-term payment plan is also known as an installment agreement. It’s for taxpayers who need more than 120 days to pay the amount, and the payments are taken through automatic withdrawals from your checking account. The streamline payment plan is available if your balance is below $50,000, and your payments will be made over 72 months with no financial information provided. Finally, for balances greater than $100,000, the IRS will require you to provide financial information including income and proof of expenses.

3. Can I receive a refund if I’m still paying taxes for a previous year?

No, you cannot receive a refund if you still owe the IRS money. For example, if you owe the IRS $1,000 for tax year 2019 and you are receiving a refund of $800 in tax year 2020, then the IRS will apply the $800 refund toward what you owe, bringing your total owed to $200.

4. I made a mistake on my tax return that’s already filed. What should I do?

If you forgot to income a 1099 or W-2, or other income or deductions, the IRS may sent you a CP2000 Notice which will show this increase in income. If there is an error on your return, you should consider filing an amended or corrected return using Form 1040-X. When filing an amended return, be sure to include any forms that you’re changing that you did not file originally. The IRS typically takes up to 16 weeks to process amended returns. Recently, the IRS has finally decided to process amended returns electronically. In the past, amended returns must have been paper filed.

5. Should I file make estimated tax payments?

Quarterly taxes, or estimated tax payments, are typically made for the current tax year if you expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits. Or, you expect your withholding and refundable credits to be less than 90% of the tax to be shown on your current year’s tax return, or 100% of the tax shown on your prior year’s tax return. Quarterly tax payments are often filed by independent contractors, sole proprietors and businesses that do not have their taxes withheld in paychecks.

6. How far back can the IRS audit you?

The IRS typically does not go back more than three years to audit. However, they can go back further if they find a substantial error. Six years is usually the maximum. The IRS tries to audit tax returns as soon as possible after they are filed.

7. What does an IRS letter look like?

The IRS does most of their corresponding with taxpayers through the mail. A real IRS tax letter will contain the IRS seal on the notice. It will also typically have a portion of your tax ID number and will include the tax year in question. Most importantly, the letter will have a notice number of letter number on the top right-hand corner of the letter. If neither of those numbers are present, the letter you received is likely fraudulent. IRS correspondence also generally includes contact information in the form of a 1-800 telephone number.

8. How does the IRS notify you of an audit?

If the IRS has identified you to be audited, you will receive a written letter via mail. The IRS does not issue audits through email or phone calls.

9. What is the statute of limitations for an IRS audit?

Generally, the IRS will audit you within three years of the tax return in questions. However, the agency has the legal right to audit and try to collect unpaid taxes for up to ten years. Once the ten years has passed, the statute of limitations runs out.

10. How do I appeal an IRS offset? 

A tax offset is when money from your tax refund is withheld by the IRS to pay taxes you owe for a prior year, including federal or state taxes and student loan debt. To appeal an IRS offset, contact the agency that received the offset payment. If you are appealing the offset being used for federal tax debt, you would appeal to the IRS.

11. How long can the IRS collect back taxes?

The IRS has the ability to collect back taxes for up to ten years from the date they were originally assessed.

12. Does the IRS use collection agencies?

If you owe money to the IRS, your bill may be assigned to a private collection agency. These agencies work with taxpayers and help them settle their debt. The private collection agency will send taxpayers a confirming letter detailing their unpaid tax liability. You may receive a follow-up phone call from the agency, but only after they sent an initial letter through the mail.

13. Can the IRS collect after 10 years? 

As a general rule, no. Once ten years have passed, the IRS cannot collect any outstanding money owed for the date the taxes were assessed.

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