What happens if you have back taxes?

Back taxes are taxes that must be paid but have not been paid.

Late taxes are

subject to penalties and interest and must be returned in a timely manner. If back taxes remain unpaid, serious legal action can be taken, such as tax levies, wage garnishments, or prison terms. We may file a Federal Tax Lien Notice in the public registry to notify your creditors of your tax debt.

A federal tax lien is a legal claim on your property, including the property you acquire after the lien arises. The federal tax levy arises automatically when the IRS sends the first notice demanding payment of the tax debt charged to you and you don't pay the full amount. Filing a federal tax lien notice may affect your ability to obtain credit. Once a tax arises, the IRS generally cannot release it until the tax, penalty, interest and registration fees are paid in full or until the IRS can no longer legally collect the tax.

Paying your tax debt in full is the best way to get rid of a federal tax lien. The IRS releases your right of withholding within 30 days after you have paid your tax debt. If you need more time to pay your tax bill, the IRS will likely give it to you in the form of a payment plan. A payment plan will allow you to pay your late tax bill (plus accrued interest and fees) in installments over a period of time.

Back taxes are simply money you owe to the Internal Revenue Service. When you don't pay your taxes or pay the wrong amount, you owe “back taxes.” If you remain unpaid, you have a “tax debt” that the IRS will attempt to collect.