Tuesday, July 17, 2012

Tax Debt Will Not Go Away


Tax debt, either state or federal, will not go away!  In other words, you must deal with the problem, directly and honestly, with the tax authorities involved.

Some tax debt is worse than others.  For example, if you own a business you have a legal obligation to collect withholding from your employees and pay over that withholding tax to the government.  Legally you are holding the funds you withheld from your employees check, in trust, for the government.  If you do not pay these funds over to the government,  you have violated your legal duty to pay over these 'trust funds' --  the government 'can' prosecute you criminally for willful non-payment of these trust funds.  Don't go there!

IRS will deal with a cooperative and a willing taxpayer to collect the tax debt on some reasonable agreement --- be it installments or a possible statutory compromise agreement.  Your tax debt will not away unless, you the taxpayer responsible, takes timely affirmative action, by making a specific agreed arrangement for payment.

Seems simple and straightforward.  Deal with the problem now or deal with a greater problem later -- under greater stress, with possible legal fraud penalties or criminal prosecution or both, inevitably, down the road.

There are compromise procedures in place that you may qualify for under the IRC. You may have seen TV  ads by  'tax resolution' services -- these services must comply with the tax code procedures, in the same way, the taxpayer, must comply with the procedures.  It is often prudent to retain a tax professional, experienced in the compromise procedures, to determine whether you qualify and have the funds available to complete a compromise agreement.

Whatever you decide to do -- do it now -- not later.  The problem will not away -- it will get much worse.  Be completely honest with your situation and your tax debt problem can and will be resolved.  The government simply must collect the tax mandated by the tax Code, as enacted by our Congressional representatives.

Face the music and enjoy your life free from debt, particularly tax debt.