Business, Legal & Accounting Glossary
Taxes that have not been paid on the due date or were underreported either by accident or by intention on a past tax return. The tax authorities can demand payment of back taxes plus the imposing of penalties and or interest.
Back taxes are taxes owed for years prior to the current tax year. Back taxes are generally considered past due taxes. Because back taxes are generally treated as late, interest and penalties are often attached and must be paid at the same time that the back taxes are brought up-to-date. Back taxes may be owed by individuals as well as businesses and corporations. If an individual is unable to pay all back taxes due at once, payment terms can often be arranged, although penalties and interest may continue to accrue until all of the back taxes are brought current. Under certain conditions the government may seize property and/or assets or place liens on property to satisfy back taxes, or, in extreme cases, an individual may face prison time for failure to pay back taxes.
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This glossary post was last updated: 26th April, 2020 | 0 Views.