January 29th, 2009

Tax Debt and You

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taxAs an American facing the economy today, you may be one of the many facing a tax debt with the Internal Revenue Service. Facing a large bill resulting from back taxes and old returns, is a huge problem that may seem very daunting. The IRS is a large agency, and there may be a number of reasons that you are now in your current situation. What is important is that facing a tax debt is not something that will ruin you. It will be a tough journey, but one that can easily be traversed.

The first thing to keep in mind, by no means should you avoid paying your taxes. They will not go away, as all of your records go to the IRS anyway. Filing your taxes is a way to alleviate the duties of the IRS. The IRS just does not have the resources to handle tax filing for the entire country. That is why you are required to file. What should be your course of action is to look and research various plans of attack for solving your tax debt. Individuals with less than $10,000 in debt with the IRS should work with the IRS to get a handle on your debt. The IRS is equipped to offer payment schedules and work with you to get a plan in place. Even if you feel that you are prepared and equipped to work out your problem or seek out any help, make sure you look at all possible deductions and ways of changing your tax liability.

Debts of more than $10,000 dollars are best handled by a professional. This is a situation which can ruin you financially and professionals are best equipped to handle the problem. Professionals have experience and connections which help you in your time of need. Without their help, you can easily find yourself in a situation where your children will inherit your debt with the government and become responsible for paying it off. Professionals can spot errors in prior returns, and provide help in correcting them. They also are aware of various tools and financial devices which can help you save money in repaying your debt. Make sure that if you do hire a professional, that they are reputable and possess the expertise you need to fix your situation.

It all comes down to ridding yourself of the debt that you owe to the IRS, regardless of if you use a professional or tackle the problem yourself. What ever your decision should be, it should hold into consideration the various variables that constitute what you owe, how much you make, what you are capable of handling, and if you really need professional assistance in alleviating your debt. There are amnesty programs out there that provide free counseling, and you may find that it will take hiring a professional to solve your problems and handle your IRS debt. What is of utmost importance and bears repeating again, you need to pay off this debt one way or the other.

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