Understanding IRS Tax Problems

One of the complaints we hear most at Tax Masters about the IRS, and one we know to be based in fact from personal experience, is that IRS agents and revenue officers use their knowledge of tax law to take unfair advantage of taxpayers to maximize revenue collection. It can get to the point that it is nearly mathematically impossible to pay the total tax liability with all the added penalties, fees, and constantly accruing interest. Knowing more about the most common IRS tax problems is one way for you to understand more about how the IRS sees you. Knowing exactly where you are in the IRS collections process helps you decide what action to take to resolve your IRS tax problem.

IRS Notices - The Easy Way to Diagnose Your IRS Tax Problem

The first indicator that you have a problem with the IRS usually comes in the form of a notice you receive in the mail. There are a variety of notices with all sorts of hidden traps and nuances. We added an IRS Notices page to list and briefly describe the types of notices the IRS is currently sending. Identifying which IRS notice you've received will help you determine where you fall in the IRS collections process.

IRS Collections Process - Understanding the Severity of Your IRS Tax Problem

After you have identified the type of notice the IRS sent you, you are ready to determine exactly where you are in the IRS collections process. Take a look at our IRS Collections Process page to see the Tax Masters IRS Collections Process chart and to read brief descriptions of how the IRS goes about trying to collect delinquent tax.

IRS Debt - The Most Common Tax Problem

IRS debt, also known as delinquent tax, back taxes, and tax debt, is by far the most common problem people have with the IRS. Similar to credit card or other outstanding debt, IRS tax debt can take on a life of its own, snowballing into substantial amounts of debt rather quickly with the addition of IRS penalties, late fees, and the consistent addition of more and more interest. Take a look at our IRS Debt page to read more about ways people get into severe debt situations and to see some ways to combat and reverse significant IRS debt.

Unfiled Tax Returns - A Curable Tax Problem

There are all sorts of reasons why people wind up not filing their tax returns. The problem is that taxpayers tend to slip into what Patrick Cox, founder and president of Tax Masters, calls the back tax trap, where one unfiled tax return becomes two, and three, and on down the line.

This is one of the more dangerous tax problems we see because the IRS waits an indeterminate amount of time before filing an SFR (substitute for return) for a taxpayer, which is quickly followed by a notice and a bill for delinquent tax, plus penalties, plus interest. The unfiled return may be years past due by the time the IRS acts, which in effect increases the amount you owe. Filing a past-due tax return before the IRS files for you is critical in saving you money and reducing the potential for additional IRS problems. Our Unfiled Tax Returns page has more information and advice on how to best deal with unfiled returns.

Tax Preparation and Difficult Tax Returns - Stopping Tax Problems before They Start

You can prevent most, if not all, IRS tax problems by following a few simple rules of thumb. The most important rule is to file your taxes every year, even if you can't pay. Check out our Tax Preparation page for more information about stopping IRS tax problems before they ever start.

2009 IRS Calendar and Other Resources

We have included some tax calendars and other resources you might find useful as you work to diagnose just how significant your problems are with the IRS. Check them out and then look into how Tax Masters can provide IRS tax relief for you.