Tax Planning is From Mars, Back Taxes are from Venus-Patrick Cox, TaxMasters

I was going over some things in the front office this morning and half listening to a television talk show playing in the back. Taxes were the issue. The anchor was interviewing someone about wise tax moves to make before the end of the year, talking about how the current economic downturn could have personal tax liability benefits. All the standard advice for saving on taxes was there along with some timely items–converting traditional IRAs to Roth IRAs, maximizing deductions, making sure that withholdings are accurate, even taking a portion of investment loss straight off the top of your income. All interesting items and worthy of note, for sure. But my thoughts turned to those of you watching that segment who have a real tax problem. It seemed to me like a preacher talking to the choir, if you’ll pardon the expression, with absolutely no regard or consideration for what is a growing segment of the taxpayer population. As the economy gets worse, delinquent taxes will increase, the IRS will work harder to collect, and the back tax trap will continue to snare the unwary.

Notification of Back Taxes

That first back tax letter from the IRS is a scary thing. You open it and realize you’ve been identified by one of the most powerful American institutions as being delinquent on paying your taxes. IRS debt is not like credit card debt or bank loans in that you simply cannot default on back tax debt. Once you have it, you have to address it, no matter the reason and no matter the cause. The IRS might even be wrong, but back taxes will not go away without you doing something about it. Even if you’re no longer living, the IRS often pursues your loved ones to make sure they get the revenue they believe is theirs.

Preempt IRS Efforts to Collect Back Taxes

Most people with tax debt come to the realization fairly quickly that they have to do something to address their back taxes. The problem is they just don’t know where to start. There are several strategies you can use, and all involve dealing directly with the IRS, or employing the services of a good tax resolution firm like TaxMasters to represent you. If there is any negotiating that needs to be done with the IRS, I strongly encourage you to seek tax representation. Back taxes are no joke. Don’t wait for collections efforts to catch up with you. One thing we understand well at TaxMasters is that every day you choose not to act to resolve your tax problem gives the IRS another opportunity to ratchet up their efforts to collect.

If you have a tax problem, be it with back taxes or something else, give us a call and let us talk to you about your options. If, on the other hand, you are one of the fortunate who don’t have back tax problems, please continue to plan appropriately and stay on the right side of the IRS.

Until you need us,

Pat Cox