A tax debt is a liability that an individual or corporate taxpayer owes to the IRS for federal income taxes or the Franchise Tax Board for California income taxes. Needless to say, the governments of the day desperately need revenue which means they will take aggressive action to collect any tax debt owning.



Even presidential candidates are not immune from the tax collector in pursuit of an overdue tax debt. According to the Washington Post, the Internal Revenue Service has filed a tax lien seeking more than $800,000 from Sen. John Kerry's 2004 presidential campaign, escalating a dispute over payroll taxes that the lawmaker's office blames on faulty government paperwork. The episode has left a candidate who fell just a few percentage points short of winning the White House trying to convince the government's tax collector that his campaign already paid the taxes and doesn't owe any more.

Now if all the high priced talent working on the presidential campaign are having a rough time with the IRS, you can count on it that any tax debt problem a taxpayer has will be pursued with vigor not seen in recent times.

Here is where a taxpayer often needs a tax attorney or a CPA to come to the rescue. The steps to resolve a tax debt problem:

1. Determine if the tax debt is correct. The fact of the matter is that the IRS and Franchise Tax Board do make mistakes. Taxpayers should not rely on what the tax authority says is due and payable. Get it verified by a tax professional.

2. If the tax debt is not correct, then action must be taken to get the errors corrected before the tax collection gets nasty?like asset seizure or wage/salary garnishment.

3. Once the tax debt has been determined to be correct, then the method and timing of payments needs to be worked out and agreed with the IRS or Franchise Tax Board. There are a number of options available to a tax payer including Offer In Compromise and installment plans.

What a taxpayer should not do is nothing. With regular communication with the tax authorities most tax debt matters can be resolved to the satisfaction of both parties. However, if no action is taken by the taxpayer, collection action will proceed?all the while getting more forceful as time passes. The tax man has many powers to make a taxpayer pay up. Ignore it at your risk.

John Spurgeon is a tax attorney in Pasadena, California servicing clients in the greater Los Angeles area. John Spurgeon & Associates, who are both tax attorneys and CPAs, have the proven knowledge and experience to effectively deal with IRS tax liens or the Franchise Tax Board. Please call 626-440-9518 for a complimentary initial consultation.

About John Spurgeon & Associates

John Spurgeon & Associates is a professional services firm located in Pasadena, California with a focus on tax law and related accounting services. They have extensive experience with federal and state income taxes, payroll taxes and sales taxes. They represent business, non-profits and individuals against the IRS and the Franchise Tax Board (California State Taxes). As both tax attorneys and Certified Public Accountants they offer a broad range of tax related services.