If you’re behind on tax payments, it is easy to lose track of how much you owe. Luckily, there are a few ways to find out – you can check on the IRS’s website, look at your last IRS notice, or pay a tax pro to figure it out for you.
The following sections detail how to figure out how much you owe the IRS in unpaid taxes. This post also outlines how to deal with common challenges related to accessing your information online.
At Damiens Law, our team is ready to help you find out your tax balance and set up a plan to get it paid off, whether that means applying for an installment agreement, an offer in compromise, or negotiating with the IRS. To get help now, contact us today.
Key Takeaways
- To find out exactly how much you owe, check your IRS online account or call the IRS.
- The IRS online tool shows taxes due, penalties, interest, and payments made.
- To estimate the balance due before interest and penalties, look at old tax returns or IRS notices.
- The amount you owe determines which payment plans or settlements you may qualify for.
- Contact Damiens Law to get help finding what you owe the IRS and getting back in good standing.
How to Find Out How Much You Owe the IRS
Staying knowledgeable about tax return deadlines, tax percentages, and reporting requirements helps you comply year after year. If you’re not sure how much you owe, you have a few ways to find out:
Login to Your Online IRS Account
One of the most convenient ways to check your balance and make payments is using the IRS Online Account tool. Once signed into your account, you can see:
- How much you owe as of the day you log in
- Your balance for each tax year, if applicable
- Tax payment history
- Tax return information
- Copies of IRS notices you have received
- Payments made to you such as tax refunds or stimulus payments
- Your current address on file with the IRS.
You can also use your online IRS account to request an installment agreement if you want to pay over time, set up an identity protection PIN, and manage preferences such as going paperless.
Call the IRS
You can also simply call the IRS to ask about any unpaid taxes. Individuals should call 800-829-1040 and businesses can call 800-829-4933. You can speak to an IRS agent about what you owe and any penalties you have on your account, but unfortunately, hold times are often an hour or more.
Have your information ready, such as your tax returns and your Social Security number. The phone agent may require you to verify your identity by providing information from past tax returns.
Watch for Mail from the IRS
The IRS sends notices through the regular mail regarding missed deadlines and payments. If you have an outstanding balance, the agency will notify you via mail how much you owe and any penalties you have to pay. Check your mail regularly and review any IRS notices carefully to see how much you owe.
How to Use the IRS Online Account Tool
Many taxpayers decide to go the online account route because it’s easier and much faster than waiting on hold to talk to an IRS employee on the phone. In the long term, it’s also convenient to have access to online self-service tools.
Here’s a step-by-step guide to set up your IRS Online Account:
Create an Account on ID.me
First, the IRS uses ID.me to verify your identity. To set up your account, you need your email address and must create a password. You’ll get an email to confirm your email address before moving on — just click the link in your email, and then you can return to your previous open window to continue.
The system then asks you to set up multi-factor authentication, so select text message or phone call, push notification, code generator application, or passkey. This is a second authentication step (in addition to the password) to confirm it’s really you.
To continue verifying, you can either select self-service, which requires uploading your driver’s license, state ID, or passport and then taking a selfie or video call. The video call takes more time than the selfie, but it’s a more comfortable option for some taxpayers.
This process can take time, as the system will text you a link to upload your driver’s license front and back images and to take your selfie. The system will then have you verify your Social Security number and your personal information. Then, you’ll confirm your phone number.
Browse Your Account Information
Once you’ve set up ID.me, you’ll sign in using that site to access your IRS account. Once you’re logged in, you can then view information like how much you owe in taxes, what you owe or paid for each tax year, payments made in the past, and any IRS notices you should have received in the mail.
Take Actions Through the System
After you figure out how much you owe, you can make a payment or set up a payment plan right in the online account. To do so, follow the headers and prompts in the online account. You can also download your tax records and request transcripts through the system.
Gaining access to the IRS Online Account feature means you can access this information anytime you log in. You can avoid waiting to speak to an IRS agent or waiting for the regular mail to deliver your documents.
If you’re still not sure how to use your online account, talk to a tax professional for guidance. An online account can also help you get faster service when working with a tax pro – in particular, it speeds up the process of giving a tax pro power of attorney privileges. Normally, tax pros have to mail or fax in these forms which takes time, but if you have an online account, the pro can send a power of attorney request and you can approve it in your online account almost immediately.
How to Determine if the Amount Due Is Correct
Surprised at how much you owe? Wondering if it’s the correct amount? Then, you may want to look through your tax returns and IRS notices. The returns will show the amount due when you filed and the notices will show any changes or penalties the IRS added to your account.
Again, you can download all of this information from the IRS online account. Or you can ask a tax pro to download the information, show you how much you owe, and explain how the IRS came to this number.
How to Request Tax Records via Mail
If you can’t get your records online, you can call and request that the IRS mail you the information. You’ll just need to verify your identity and address, and then, you can request the following types of transcripts:
- Tax returns, including most line items but not a full copy
- Account statuses, such as filing status and taxable income
- Record of account (a combination of the two above transcripts)
- Wage and income data
- Verification of non-filing letter, which indicates the IRS hasn’t processed your tax return
You can submit your request online for mailed transcripts, or you can call 800-908-9946. You can also use Form 4506-T, Request for Transcript of Tax Return if you want to handle the whole process through the mail. If you’re not sure what you need from the IRS, ask a tax expert at Damiens Law before making your request.
What to Do If You Have Unfiled Tax Returns
Once you uncover how much you owe, you may figure out that you have outstanding tax returns for the most current year or prior years. This can lead to IRS penalties and building interest if you owe money for those years.
Sometimes, the IRS will file a substitute for return (SFR) when you haven’t filed a return but the IRS has received information about your income from other sources — like a financial institution or employer. You want to avoid SFRs, though. The IRS won’t account for any deductions or credits you qualify for, so your tax bill will likely be higher with an SFR versus your correct tax return.
The IRS should send you a notice in the mail if they’ve filed an SFR for you, which will also include their tax assessment based on the SFR, and you should also be able to see that info in your online account. You usually still have time to file a correct return when you receive a notice, so act quickly.
If the IRS has filed an SFR, you can generally supersede it by filing a new return. If there hasn’t been an SFR issued, you will need to file those back taxes – typically, the IRS requires the last six years of tax returns before letting taxpayers set up payments or offers in compromise.
Options for Paying Off Your Tax Balance
Knowing your balance is one thing; paying it off is another. Whether you can cover your full bill now or you need more time, here are options for getting your taxes paid off:
Pay Your Balance in Full
The fastest way to get back in the IRS’s good graces is to pay off your full balance now. You can pay online with a few clicks using a bank account, credit or debit card. This way, you can avoid any other penalties and interest from building on your account, and the IRS won’t take further collection actions.
If you don’t have an online account, you can pay through the EFTPS website. You need your Social Security Number, the type of tax, the tax form, and the tax period.
Request a Payment Plan
If you owe less than $50,000 as an individual or less than $24,000 as a business, you can request payment plans online, so you can pay off your balance in monthly installments. If you owe more than these amounts or need longer than provided with the online options, you can apply through the mail or on the phone.
Apply for an Offer in Compromise
Sometimes you may not even be able to afford a monthly payment plan. If this is the case, you can apply for an offer in compromise using Form 433-A (OIC) or 433-B (OIC). You will need to provide details about your financial situation to show the IRS that you can’t afford to pay your full balance. Include an offer of what you can pay. If the agency believes your offer is all they can reasonably expect to collect from you, they may accept it and let you settle for less than owed.
Ask for Temporary CNC Status
Taxpayers going through financial hardship can also request a temporary pause on collections, known as currently not collectible (CNC) status. The IRS will not continue its collection actions, such as filing tax liens or levies on your property. Once your financial situation changes, your account will be taken out of CNC status.
Request Penalty Abatement
If the IRS is charging you a penalty, you could qualify for abatement. First-time penalty abatement may apply if you have a history of good tax compliance and haven’t had a penalty in the last few years. Abatement for reasonable cause may apply if you went through an event such as a death or natural disaster that got in the way of your ability to comply.
To request abatement, follow the instructions on the IRS notice you received to contact them. There are forms to request penalty abatement, but you can also just call and ask for first-time abatement.
Understanding the Statute of Expirations
When you have unpaid taxes, you need to know something called the collection statute expiration date (CSED). This is 10 years from the date your tax was assessed. After the CSED passes, the IRS can no longer collect that amount from you.
The CSED can lead to your taxes being forgiven in certain rare cases. For instance, if your account is in CNC status because of financial hardship, and it stays in that status until the CSED expires, the IRS will no longer collect from you after that time.
However, it’s important to note that the CSED can also be paused and restarted. After you apply for a payment plan or an offer in compromise, for example, the CSED is paused while your application is under review. Unfortunately, this can lead to mistakes in the system – if you believe that the CSED is incorrect and your tax liability should expire sooner, reach out to a tax pro for help.
You can view your CSED by examining your records and transcripts online or talking to a tax expert about your situation.
FAQs about Unpaid Taxes
How Do I Know How Much I Owe the IRS?
You can find out your tax balance by setting up or logging into your IRS Online Account, calling the IRS, reviewing your tax returns, or reviewing IRS notices received in the mail.
What If I Can’t Access the IRS Online Account Tool?
The system can be tricky to deal with. If you’re having trouble accessing your information, you can contact the IRS or ask a tax professional at Damiens Law.
Can I Apply for a Payment Plan Online?
Yes, most taxpayers qualify to request a payment plan through the online system. You can also view plan details, reinstate a plan after default, and make changes to your plan online.
How Can I Pay My Tax Balance in Full?
The IRS allows you to pay via direct debit from your checking or savings account, using a credit or debit card, sending a check or money order, or using the Electronic Federal Tax Payment System (EFTPS).
What If I Can’t Afford My Tax Debt?
If you can’t pay your balance even with a payment plan, you could qualify for an offer in compromise, partial payment installment agreement, or currently not collectible status. Ask a tax expert when you’re not sure.
How Damiens Law Can Help
Navigating the IRS Online Account system and trying to figure out your balance can be complex and time-consuming. Professional help is available so you know your options and what you may qualify for to find relief.
The team at Damiens Law is experienced in issues ranging from unpaid taxes and unfiled returns to offers in compromise and payment plans. Contact our office today to set up a consultation with a tax attorney.
