Tax Debt Help 101: How to Figure Out What You Owe the IRS

In many cases, many people are unsure how much they owe the Internal Revenue Service (IRS) in taxes if they forgot to file, pay, or pay the total amount with a tax return.  Realize that everyone has to file a tax return with the Feds if they made over $8.95k (2008) whether overseas or living in the US. If married, and filing jointly this minimum income number is $17.9k.

If you have received various IRS letter or CP Letters (Computer Paragraph Letters) stating how much you owe currently or if these letters are old (more than 3 months) you can estimate your total tax liability because it is typically shown on the IRS letter received (example: CP-501, CP-502, CP-503, CP-504 & others). If you have not received any letters at all or in while, you can obtain the total amount of back taxes you have in three basic ways.

1. Call or Go to an Internal Revenue Service Office – Call the IRS hotline toll free at 1-800–829–1040 who will help you or direct you to someone that can provide your current account status.  You can always pay a visit to your local IRS office which is sometimes more effective in order to find out how much you have (if any) in IRS back taxes including penalties and interest.
2. Fill Out Form 4506T – This form is called the “Request for Transcript of Tax Return.” Basically, by sending this to the IRS you can request an “Account Transcript” as well as a “Record of Account” which will show you a timeframe of the last 3 years plus this year as well.
   1. Download and Print Form 4506-T or call the IRS directly for one and they will mail it to you.
   2. Complete form 4506-T, being sure to check six “C” for a “Record of Account”
   3. Enter the periods or years in Section 9 (up to 3 years including this year is available). If you need more than 4 years or periods then fill out another 4506-T or fill out form 4506.
   4. Sign and Date and send to the appropriate address (IRS address  for your state is on the “General Instructions” of Form 4506-T)
   5.  Wait 30 Days for a response as requests typically will take 4-6 weeks
3. Reach Out To A Tax Resolution Firm – Many tax resolution firms can request this for you as part of their service if you know for example that you at least owe the IRS $7.5k. If you are considering working with a tax attorney, CPA, or tax relief firm, then it is best to have them request a “Record of Account” on your behalf as they will be familiar with the process and save you a lot of headache.

The fact that you are interested in knowing how much you owe is the first step to resolving your tax problems with the IRS or getting into compliance with the IRS.  It is imperative that you know how much you owe in back taxes so you or your tax professional can figure out the best path for an IRS resolution. During this economic downturn, the IRS and States are doing everything they can to make up for lost revenue which includes a greater effort to recoup back taxes owed to them.  If you are looking for a tax resolution firm to help with tax debt, as well as help you find out home much you owe the IRS, visit TaxDebtHelp.com today.