Tax Problems ? Procrastinate At Your Peril



We can talk all day about whether we should have to pay taxes to the government. As recently as the late 1800s, there was no income tax. Ah, for the good old days! Unfortunately, the reality of modern life is the government has grown into a large child both on the state and federal level. As citizens of this great country, we are the parents of these beasts and responsible for feeding. Breakfast, lunch, dinner and snacks all come in the form of tax payments. If you fail to feed the children, they can get downright mean.

The number one thing individuals and couples worry and argue about is money. Simply put, few of us are millionaires and we have to stretch every dollar. The more you make, the more you spend. Inevitably, a certain percentage of us are going to get behind on our taxes. When this happens, a very strange thing happens ? nothing. If you fail to pay your taxes on April 15th, the IRS does not call you the next day. Months and years can go by, and still you will hear nothing. Are you in the clear? No.

Much like the overall government, federal and state tax agencies are bureaucracies. They don't react particularly quickly. Once they get moving in a particular direction, however, they are hell on wheels. This is particularly true of the beloved Internal Revenue Service.

If you fail to pay taxes, the IRS will take its time getting around to collecting from you. So, can you just wait for them to catch up to you? You should not. The first time you realize they are after you may be when they suck all the money out of your bank account. Even if they are polite enough to contact you first, they are going to come swinging big hammers. While it may have taken them a few years to catch up with you, they are going to charge you penalties, late charges and interest for the back taxes. It is not a defense that it took them a couple years to contact you.

If you are behind on your taxes, you should voluntarily contact the IRS to resolve the issue. Ironically, the best time to do this is when you are dead broke. If the IRS discovers that you have no assets and nominal income, it will often write-off the past taxes. If you have assets and income, voluntarily contacting them will result in a payment plan instead of something potentially nastier.

While you may get away with back taxes for a bit of time, they will always catch up to you. Tax agencies view voluntary efforts to resolve problems with a much friendlier attitude than if they have to hunt you down. Don't sit on your tax problems and hope they just go away.