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angelicabailey93
New Member

I owed taxes in 2017. In 2018 until present the IRS has been keeping my refund to pay my back taxes. The problem is, my bill never goes down, it get higher! What can I do

The IRS send statements saying we paid $xxxx to our back taxes. Then a month later a tax bill comes in saying we owe almost double what we owed before. This happens every year.
2 Replies
Opus 17
Level 15

I owed taxes in 2017. In 2018 until present the IRS has been keeping my refund to pay my back taxes. The problem is, my bill never goes down, it get higher! What can I do

Start by getting your IRS transcripts; get your tax return transcripts and your account transcript, which should show the penalties and interest being added to you account and the taxes being credited to your account.

 

If the math adds up, then you are just getting beaten by the interest and you need to pay more.  The penalty is 0.5% per month and the interest is a variable APR around 3-4% per year, so the total could be 10% or more per year, compounded monthly.   For every $1000 you owed, it will increase by more than $100 per year, if your refund is less than the new penalties and interest, the penalties and interest may be gaining on you faster than you pay it off, and you just need to pay more.

 

In the unlikely event that your refunds are not being applied to your tax due balance, you will have to call the IRS to straighten it out.  You can also try calling the Taxpayer Advocate service.

https://www.irs.gov/taxpayer-advocate

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Opus 17
Level 15

I owed taxes in 2017. In 2018 until present the IRS has been keeping my refund to pay my back taxes. The problem is, my bill never goes down, it get higher! What can I do

Incidentally, I would not contact one of those "get out of tax debt free" companies that advertise on late night TV and social media.  They will take more in fees than they save you.  If your debt is large enough that you want to make a settlement offer, I would contact an enrolled agent in your area, that is an accountant who is specifically approved to practice in front of the IRS.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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