Tax debt isn’t something that most people plan to have. Like most of life’s annoying setbacks, it’s something that usually catches people by surprise, and as a result, there are a lot of people who end up owing back taxes who have never really done much research into them. After all — why go out of your way to learn about tax debt if you’re convinced that you’ll never be in that situation?
It’s understandable that many people don’t know the ins and outs of tax debt. When this becomes a problem, however, is when they act according to incorrect information. There are many misconceptions floating around about tax debt, and it’s important to be aware of them so that you, too, don’t get duped.
Do you owe back taxes? Are you seeking to stop an IRS levy or wage garnishment? Before you take any major actions in your tax debt relief plan, make sure you understand some of the oft-propagated myths about the subject.
Myths and Misconceptions About Tax Debt
It’s Best to Ignore Tax Debt Until You Have a Solution
There are a lot of people who ignore their back taxes when the IRS starts writing. Most of these people have some sort of intention of addressing the problem, but since they can’t solve it immediately, they choose to do nothing.
Instead of spelling everything out in detail, we’ll go ahead and cut to the chase by saying that ignoring the IRS is always worse than acknowledging them.
Sure, you might be able to blow off unwanted commitments by pretending you never heard about them. You might be able to delay work projects if you claimed you missed the memo. Sometimes you can get away with this, but with the IRS, you’ll only make it worse.
When somebody pretends not to exist, it’s a threat to the IRS’s plans, because nonexistent people can’t pay debts back. So instead of just assuming that their communication isn’t reaching you, they will assume that you’re deliberately avoiding the problem, and they will intensify their punishments until your situation gets so bleak that you’re forced to confront the issue— or until the IRS levies your assets.
There Are Only Financial Consequences to Tax Debt
Everyone has their own thoughts on governmental efficiency — many believe that the government wastes resources endlessly, and is hardly, if ever, efficient. But whatever you believe about the government, there will always be one thing that’s unilaterally true — their inefficiency disappears real fast when it’s time to collect money from you.
Yes, the IRS takes taxes seriously, and you can bet that if you don’t pay them in full and on time, it won’t be long before they take notice. And since the IRS is dead set on collecting every last cent, it shouldn’t come as a surprise that there can be legal and criminal consequences to neglecting your taxes.
In other words, you can stand to lose a lot more than money if you’re bogged down with back taxes. In fact, tax debt can be a criminal offense if it’s severe enough, or if you continually dodge the IRS. For some people, debt is a manageable problem — a criminal record is not.
It’s Too Late to File My Taxes Because I Missed the Filing Date
Yes, there is a filing date. And yes, you will get fined if you file late, or if you fail to file at all. But as experienced CPAs, let us be the first to tell you that it’s always better to file late than to never file at all.
We touched on this a little bit above, but it’s important to file even if you can’t afford the amount of taxes you are. Ignoring it is a sign of deliberate avoidance in the eyes of the IRS, and they’d rather have the amount you owe on file rather than having nothing at all.
I Don’t Need Help With My Tax Debt
Sure, there are some occasions where tax debt is negligible. If you’re just a hundred dollars short, you probably don’t need help from professional accountants and finance professionals about how to save up that amount — some simple scrimping and saving will do.
However, in many scenarios, back taxes are much more serious than that, and it’s wise to seek advice from professional tax accountants who can tell you what your best tax relief options are.
The other big factor is that your options open up significantly when you talk to a CPA. Not only do we frequently work with the IRS and have a deep understanding of their methodology and tendencies, we also have resources that increase the number of solutions available to you.
If you talk to a professional CPA, we can help with the following things:
- Installment Agreements
- Partial Payment Installment Agreements
- Offers In Compromise
- Currently Not Collectible Status Requests
- Penalty Abatements
- First Time Abatement Penalty Abatements
- Innocent Spouse Relief
- Back Tax Returns Completion
- Stop Tax Levies And Wage Garnishments
- IRS Responses To Notices Received
- IRS Tax Payment Plans
Unless you have an exhaustive knowledge of tax law and finances, you probably won’t be able to reap the maximum benefits from any of those options on your own. But at our tax accounting firm in Fort Myers, we analyze the specific circumstances of every single client, and we create a tax resolution plan that’s tailored to their needs.
It’s Too Expensive to Work With Tax Professionals
As finance professionals, we’re very quite aware of the reality that a business won’t last long if they give away their services for free. So, yes, we do charge for tax relief services, but in the long run, you stand to gain more from working with finance professionals when you’re faced with tax burden.
First of all, there’s the matter of timing. When you owe back taxes, your IRS debt increases by the day. When you work on your own, you might be saving money, but it’s highly unlikely that you’ll engineer an optimal solution faster than a team of CPAs would — and every day you spend working out your tax resolution plan, the more money you end up owing.
Optimization is also a factor — many people aren’t familiar enough with tax law to reap the maximum benefits on their tax returns. And likewise, when they’re faced with IRS tax debt, their lack of tax knowledge can lead them to follow solutions that don’t take care of the problem as quickly as it could be solved by tax accountants. In other words, you might be losing money in the long-term by not working with a team that can give you a tax relief plan that’s uniquely suited to your circumstances.
Tax Relief Services in Fort Myers
Nobody should have to bear the continual stress that comes from back taxes. That’s why you should contact the CPA’s of Florida if you need help with IRS debt settlement. We are highly experienced in our craft and have the utmost confidence that we will find the solution to your back taxes that’s best to you. If you’re in Fort Myers, Naples, Sanibel Island, or other surrounding regions, contact us today.