The Only Thing Scarier Than Hannibal Lecter Is The IRS And Tax Debt
“All good things to those who wait.” Potentially dangerous words, don’t you think? There was a time when I thought that quote seemed full of homespun charm and wisdom. A saying parents use to teach children the importance of patience. Then Hannibal Lecter reinvented it with mocking scorn and a West Virginia coal miner twang to Clarice Starling in “The Silence of the Lambs.” I realized instantly that “all good things…” was little more than a lazy rationalization, an excuse to procrastinate. I guess you could say that Dr. Lecter helped me swear off fava beans, Chianti, and meaningless passages best left as needlepoint affirmations on decorative pillows. Because if you have a problem, the wisest course of action is to begin addressing it immediately, right? And that goes double, triple and beyond if you’re faced with a looming IRS back tax liability. Crossing your fingers and hoping for the best while you wait to see what the IRS does next is madness. Even serial killers know that.
get started fixing your back-tax problem
the sooner the better
At M&M, however, we prefer a different version of “All Good Things,” in that they “come to those who wait, but only those things left by those who hustle.” Some attribute this quote to Abraham Lincoln. If he did say it, what Honest Abe may be suggesting is that waiting for the IRS to make the first move when you have a growing tax liability is like squandering your last roll of quarters at the casino: It’s a fool-hearty plan that could leave you penniless.
The bottom line is that when you have a tax debt, you must be proactive.
Tax Resolution Tips
Waiting isn’t the only mistake delinquent taxpayers make; there are plenty of them. Once a taxpayer falls behind in paying the tax, the mistakes seem to keep on coming. Here are a few common mistakes and tips to help.
- Unfiled Tax Returns. Holding on to a tax return and not filing because you don’t have the money to pay the tax is a big mistake. The IRS and State taxing authorities not only assess penalties for non-payment, but big penalties for failure to file. Always file your tax returns timely, even if you don’t have the money to pay the tax due.
- Payment Toward Back Tax Instead of Current Tax. Generally, you must be compliant with your current taxes before the IRS or State taxing authority will allow you to resolve your back-tax debt with anything other than a lump sum full payment. You’ve got to prove that you can meet your current tax obligations before securing a formal resolution to the back tax.
- Not Cooperating with IRS or State. When you owe back taxes, you’re basically guilty until proven innocent. If you miss a deadline with the IRS or State, something bad is likely to happen, including levies and seizures. Whatever it is, you’re probably not going to like it. Communication is key.
- Hiring the Wrong Professional. Hiring a professional to do what they do best and help you with something you know nothing about is almost always recommended. But hiring the right professional is crucial. Hiring a handy man to fix your plumbing isn’t recommended, unless you don’t mind your basement full of water. Hiring the plumber with a rotten reputation is an equally bad idea. The same is true of Tax Resolution Firms. Hiring the right company during a vulnerable time can make or break your livelihood.
- Representing Yourself Before the IRS or State. We’ve heard it all before. · “What can you do that I can’t do?” A lot! Keep reading our blogs and call us to find out. You’ll be glad you did. · “My IRS Revenue Officer says I don’t need outside help!” Really? The person the IRS has hired to collect the tax you owe is telling you that you don’t need outside help? I see a conflict of interest here. Of course the bill collector doesn’t want the debtor to know as much as they do. That would mean more work and that they won’t always get their way. We know government employees don’t want more work! · “My accountant’s handling it!” See above, Not Hiring a Professional.
- Too Much Trust in Your Employees. Most businesses need employees to be successful. And as a business owner, you need to have a certain amount of trust in your employees. But our suggestion is to place most of your trust in the system that your employees are trained to execute. Employees making decisions can be catastrophic, especially when you’re dealing with employment tax. You also need to have checks in place to make sure your employees are performing within your system as they should. Remember, embezzlement is usually carried out by the person or employee you trust most.