Owe Back Taxes to the IRS? We Can Help You Resolve It
If you owe the IRS money from a prior tax year, ignoring the balance rarely makes it easier. Interest charges and late-pay penalties accumulate rapidly, and IRS collection notices can become increasingly serious over time. At EDG CPA, we help individuals, self-employed professionals, gig workers, and small business owners understand what they owe, what options are available, and what steps make sense next. Our goal is to replace guesswork with a clear plan.
What Are Back Taxes?
Back taxes are unpaid balances from a return that was already filed. You may have filed on time but did not pay the full amount due. This differs from an unfiled return, where the required return has not been submitted. If you still need to file an old return, that should be addressed separately as part of getting current.
To ensure we are working from the right numbers, we begin by reviewing your official IRS account information and records rather than relying solely on a single collection notice.
How Back Tax Debt Grows Over Time?
Unpaid tax debt can become significantly more expensive over time. The IRS generally charges interest on unpaid liabilities; at rates set by the IRS quarterly that compound daily; along with penalties applied for late payment. A balance that feels manageable today can quickly become harder to handle later.
That is why we encourage people to act early, even when they cannot pay in full. The answer is not always “pay everything today.” Depending on the facts, several IRS resolution options may be worth evaluating.
Your Options for Resolving Tax Debt
There is no single answer for everyone who needs tax debt resolution. We review the amount owed, income, assets, expenses, filing history, and ability to pay before discussing a path.
IRS Installment Agreement
An installment agreement allows eligible taxpayers to pay off an IRS balance over time through manageable monthly payments. Interest and applicable penalties generally continue while the balance remains unpaid.
Offer in Compromise
An offer in compromise may allow a qualifying taxpayer to settle tax debt for less than the full amount owed. The IRS considers income, expenses, assets, and overall ability to pay. Please note: OIC qualifications are strict, approval rates are relatively low, and it is not suitable for every taxpayer.
Currently Not Collectible Status
When paying would create serious financial hardship, the IRS may declare your account Currently Not Collectible. In practical terms, this temporarily pauses active collection efforts; such as levies and wage garnishments; giving you breathing room without forcing immediate payments. The underlying debt is not erased, and interest and penalties continue to accrue.
Penalty Abatement
Some taxpayers may qualify for penalty relief based on reasonable cause or a history of timely compliance. While interest continues on unpaid balances, eliminating or reducing penalties directly lowers your overall balance.
What Happens If Back Taxes Go Unpaid
The IRS has enforcement tools that become active when taxpayers do not respond or make payment arrangements. These include:
Federal Tax Lien
A legal claim against your property (including personal assets and real estate).
Federal Tax Levy
An actual legal seizure of assets or property rights, including bank account funds or garnished wages.
If you have received a final collection notice or notice of intent to levy, timing matters. We can step in to provide collection representation and establish an actionable resolution.
How EDG CPA Helps You Get Current
We start with facts. We review IRS account information, confirm the balance, and separate tax, penalty, and interest components to build a customized strategy.
Our systematic resolution process includes:
01
Account Investigation
(1–2 weeks)
Pulling and reviewing IRS transcripts, verifying balances, identifying tax years, and analyzing payment/notice history.
02
Strategy Evaluation
(1–2 weeks)
Analyzing your financial status against IRS guidelines to determine the most realistic resolution—whether an agreement, settlement proposal, or hardship status.
03
Execution & Representation (Timeline varies by IRS option)
Submitting necessary documentation, building repayment plans, and communicating directly with the IRS as your representative.
We do not promise a specific IRS outcome before reviewing the facts. We focus on a clear picture, transparent expectations, and a realistic path toward full resolution.
Who This Service Is For
Our back tax support is designed for individual taxpayers, self-employed professionals, 1099 independent contractors, gig workers, and small business owners who want to resolve old IRS balances and stop guessing.
We serve Sioux Falls, Lincoln County, Canton, Brandon, Tea, Harrisburg, and Dell Rapids. Our physical office is at 601 W 86th Street, Suite 105, Sioux Falls. A secure digital client portal supports remote work across South Dakota.
Frequently Asked Questions
How much do I actually owe?
The starting point is your IRS account and tax records. We review official IRS transcripts to confirm exact tax years, principal balances, accrued penalties, and interest.
Can penalties or interest be reduced?
Penalty relief may be available through first-time abatement or reasonable cause. Interest rates are set by the IRS quarterly and generally cannot be waived by law, but reducing underlying tax or penalties automatically lowers the total compounding interest.
Will I face criminal charges for unpaid taxes?
Owing money to the IRS is a civil matter, not a criminal one. Simply having an unpaid tax balance will not lead to criminal charges. The vast majority of back tax issues are settled through standard payment plans or resolution programs. Criminal prosecution is reserved almost exclusively for rare cases involving intentional tax evasion or fraud.
How long does resolving back taxes typically take?
There is no universal timeline. Simple installment agreements can often be established within a few weeks, whereas complex cases; such as an Offer in Compromise or penalty abatement request; typically take several months to review and process through the IRS.
Get Back Tax Help in Sioux Falls, SD
If you owe the IRS money, you do not have to navigate the system alone. EDG CPA provides personalized tax and accounting support with direct CPA oversight. Daniel Foster, CPA, leads the firm and has been licensed since 2014. We offer a free 15-to-30-minute introductory consultation with no obligation.
Call EDG CPA to schedule your free consultation today.