Michael Rozbruch is one of the nation's leading tax experts. A Certified Tax Resolution Specialist (CTRS), licensed CPA and the founder of Tax Resolution Services. He helps individuals and small businesses solve their IRS problems and is dedicated to educating the public on tax planning and other strategies for managing their personal and business finances.
Owe back taxes? Not dealing with it yet? You are not alone but there is a solution to your back taxes problem and your tax procrastination.
Any tax attorney or tax resolution professional will tell you that most of their clients who owe back taxes made the problem worse by procrastinating. It is a very human response to a scary problem. However, there's a solution to "back taxes terror" and “failure to file” syndrome. What tax procrastinators need to fear, is not the amount of back taxes owed, but fear itself.
Back taxes terror can take a number of forms. If solving IRS problems seems too difficult or you feel like you don't know enough about the tax code, there's tax help available from a good tax attorney or tax resolution professional. If you're afraid of the world knowing you screwed up your taxes, that's nothing compared to failure to file penalties or even gong to jail for tax evasion. Don't let your back taxes fear get the best of you when it comes to the IRS. People tend to ignore their back taxes problems hoping they will go away - but back tax debt will only get worse.
Fortunately, there's a solution to every back taxes problem, such as negotiating partial payments via IRS payment plans, applying for tax settlements through the Offer in Compromise program, etc. But the first step is getting over your fears by contacting a tax attorney or tax resolution professional now.
Everyone procrastinates to some degree, however procrastinating when it comes to taxes can be detrimental to your overall financial wellbeing. But there’s hope for tax procrastinators! Procrastination is most often caused by anxiety, not laziness. Back taxes terror isn't like other forms of tax procrastination. Paralyzing back taxes terror snowballs when you know you owe the IRS delinquent back taxes and your nightmare ratchets up knowing that each delay getting IRS help on your unfiled tax returns or back taxes exposes you to IRS audits, tax liens, wage garnishments, delinquent tax penalties, fines and even jail time for tax fraud.
Procrastinating on unfiled tax returns and back taxes can come in a few varieties.
1. The IRS hasn't sent you a letter yet, so you think they've forgotten about your back taxes.
Maybe you are delinquent on your taxes because you didn't file your taxes for a number of years and are hoping the IRS doesn't notice your back taxes owed. Bet your bottom dollar that the IRS will discover every unfiled tax return at the worst possible moment and then the IRS will go after your assumed debt from back taxes with levies, wage garnishments, tax liens, delinquent tax penalties and a tax audit of your federal and state returns.
The sad part of unfiled tax returns is that people who fear back taxes actually end up losing money that would rightfully be theirs. Bankrate states that "According to the IRS, 1.3 million individuals who failed to file a tax return in 2004 left a total of $1.2 billion in unclaimed refunds in the coffers. Half of those nonfilers would have received a refund of more than $552. Some also may have been eligible for the refundable earned income tax credit."
If you haven't gotten an IRS back taxes notice yet, run to your nearest tax attorney or tax resolution professional as soon as you can. Being proactive gives you an advantage so you can work on YOUR timetable rather than the IRS' even while your time is running out. Remember, the key to beating tax procrastination is taking bite sized baby steps. The first all important step is contacting a tax attorney or tax resolution professional today. Let them hold your hand through this back taxes process. Taking care of a client's anxiety is what a good tax attorney and tax resolution professional does.
2. You get a scary-looking letter or notice from the IRS and you're so terrified you can't even open the envelope.
So you stuff it under a pile of magazines, hoping it will go away. No such luck. It won't. But don't panic. Most IRS notices are about simple math or form errors. Even if you use tax preparation software, you could've clicked on the wrong check box (for example "head of household" doesn't mean who holds the remote control). Many of these errors actually work in your favor with the IRS owing you money. By not opening that letter, you are letting the IRS keep money that should be yours. But if the error works against you and you owe back taxes, delaying your response won't make it any easier. The IRS will levy penalties on you and could ratchet up their investigation into a multi-year tax audit. If you feel the IRS is in error or you can't pay your back taxes, you should contact a tax resolution professional or tax attorney. On no account should you talk to anyone at the IRS yourself. (See below.)
3. You open the big bad scary IRS tax audit letter and you are paralyzed with fear.
If you feel you are out of your depth, you are. Leave this back taxes issue to the professionals. Contact a tax attorney or tax resolution professional. A willful delay paying your back taxes or responding to the IRS could mean jail time.
Did you know it is a misdemeanor in this country not to file a legally required return when due? That’s the whole reason why actor Wesley Snipes went to jail! Even if you haven’t filed one year - it is still considered delinquent. Open your IRS letter and call a tax attorney or tax resolution specialist immediately to make an action plan.
If it is a correspondence audit letter, it will show your filed returns versus what the IRS shows was filed on your behalf by other parties. If you don’t respond with expert help then you will get another letter forcing you to go to tax court or pay up! You will also be sent to collection for your back taxes. This is why you need to go to a tax resolution professional or tax attorney, to resolve your back taxes issues before you get sent to collection!
The wrong thing to do is not respond to your letter. The other wrong thing to do is not get professional help! Here’s why: every audit we go to is an eggshell audit because the first thing that the nice auditor is going to do is ask you 54 questions - so that you can incriminate yourself. Over half of the referrals to the IRS’s criminal investigation division come from that very nice lady or gentleman you’re sitting across the table from. It’s like going to court without a lawyer.
Whether you are a chronic procrastinator or person of action, you only have one choice to deal with your back taxes problem: get expert help! A good tax attorney or tax resolution professional will make you a tax relief action plan. A back taxes solution might be an offer in compromise; the IRS will accept a much smaller lump sum for the total back taxes debt that’s owed- if you can prove that you do not have the future ability to pay the IRS off. If you try to handle your back taxes issues yourself, you’re going up against the most brutal collection agency on the planet and they are trained to say “no”! They are not in the business of saying yes to writing off back taxes and that is why you need tax expert representation!
You need to act today. Often the fear of back taxes results in tax problems compounding for years, until it starts to affect other areas of your life (self-confidence, frustration, personal/family time). So if this is you, the solution is: Stop the procrastination. Let a tax resolution professional help you cope with the pressures of back tax debt and begin the important task of overcoming them so you can regain your personal (and financial) freedom.
Okay back taxes procrastinator, you now know what to do. It is time to get started. You'll feel better.
For more information on achieving a tax resolution for your unfiled tax returns or back taxes, visit www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS.
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