IRS problems have a way of ruining all aspects of your life. And as time goes by, the IRS adds salt to your wounds by adding penalties to what you already owe. It’s like the meter in a taxi cab, the counter keeps going adding more and more charges to that IRS debt—even when you are standing still. Many times, the penalties and interest end up adding up to be more than what you actually owe the IRS. However, understanding the relentless measures the IRS takes to collect penalties—and having the right experts on your side—can help you avoid the traps that can drastically impact the way you and your family live.
You may be asking yourself, “if I can’t afford to pay my taxes, why do they keep adding penalties?” The IRS doesn’t like being ignored, so this is one way they get your attention. They want to be sure you know they are not going away, and the ongoing letters can often haunt you. If you don’t respond to them, the penalties will continue to add up. Penalties are only the beginning of what they can do to your life.
The IRS can have a lot of power over you and can do a lot to make your life miserable. They can freeze your bank accounts and seize all the money you have in them. They also can garnish your wages, taking as much as 75% of your net paycheck. Can you live off of 25% of your net pay? The IRS thinks and expects you can. Besides slapping bank levies and wage garnishments on you, they can put a lien on your house, making it nearly impossible to borrow against it to pay the IRS off. And if you sell your house, the IRS gets their money first from any equity there is. Federal tax liens can prevent you from borrowing any money—except for those high-charging payday loan stores. An IRS lien makes it harder to rent an apartment, get a car, and even possibly obtaining any kind of credit. It can even jeopardize your job. And believe it or not, the IRS has the authority to show up and knock on your door. Make no mistake, the IRS is the most brutal collection agency on the planet.
To put it simply, the government wants its money, and they want it now. They are the only creditor in the world that doesn’t need a court order to take your “stuff.” And they have a lot of leverage to do whatever they want. They can even take your personal property, including your car, real estate, motorcycles, jet skis, snowmobiles, boats, jewelry, IRAs, 401Ks, Social Security and the list goes on. If you owe them—they will collect. And they are not going to go away.
So how do you solve the problem? The only professionals who can represent you before the IRS are attorneys, CPAs, and enrolled agents. That’s it. However, you shouldn’t just go to anyone to handle your IRS tax problem. It makes sense to go to a specialist in tax resolution to handle your IRS difficulties. Remember, that for every tax problem, there is a solution.
Constant W. Watson III, CPA, CTRS, is both a Certified Public Accountant and one of only ten Certified Tax Resolution Specialists in the State of Illinois certified by the ASTPS. Watson has more than 30 years of income tax and accounting experience. You can hear his radio program, “Watson On Taxes,” every Saturday morning at 10 a.m. by tuning in to AM 1390. For more information,visit WatsonOnTaxes.com or call (708) 206-9900.