If you have recently received a notice from the IRS stating that you owe a great deal of money in back taxes, then you may panic. However, this is not something to panic about in most cases. While some liability issues are serious and require the assistance of an attorney, there are some things that you can do on your own to make things a bit more manageable. Keep reading to learn what they are.

Ask For An Installment Plan

If you owe several thousand dollars in back taxes, then there is a good chance that you cannot pay back all of this money at once. And, if you ignore the notices sent by the IRS, they will take legal action against you. Your wages may be garnished and certain assets can be seized. You can even be charged with failing to pay your tax debt. 

You can avoid situations like this by working with the IRS directly and most of the time you will be eligible to sign up for a repayment plan. Most plans are set up so you pay back the required amount within a three year time period. However, you have the option of paying it back sooner and you can also come up with the monthly payment amount that you desire.

You should know that interest will be charged on a monthly basis based on your balance and how much money you still owe. Also, if you do not make your payments on time, then you will default on the agreement and the IRS will ask for the complete balance at once. This is one reason why many individuals will set up a direct deposit to make the payments.

File Your Taxes Or Amend

The IRS will send a tax bill based on the income you made the previous year, and the tax rate will depend directly on your income. A flat rate is applied with no deductions. This means that the initial statement will be quite high compared to what you really owe. So, if you have not done your taxes for the given year, then it is in your best interest to do so. You can then set up a payment plan for the lower amount.

If you have already filed your taxes, you have the opportunity to amend them. This means claiming deductions, business expenses, dependents, and other expenses that you did not the first time around. 

Keep in mind that while it is ideal to amend and mark every deduction possible, you should never lie or exaggerate. This is likely to get you into more trouble than simply owing money to the IRS.

If you are confused about what you should do about your tax situation, contact a tax attorney as soon as possible.