The mere mention of the Internal Revenue Service can intimidate even the bravest of soles. After a turbulent few years, I found myself off of the IRS radar until about a year ago. What I learned is a tax payer lesson for the ages. As the saying goes, taxes are one of the only things certain in life besides death and they don't go away. The IRS can be relentless in their pursuit of delinquent taxes, but you learn as I did that you do have options. In my IRS battles I have gained an unwanted, but much needed education that can help you avoid death by taxes.
Don't ignore any correspondence sent to you
The IRS is known for sending redundant letters, but you need to make sure that you thoroughly read and understand everyone of them. Initially the IRS started sending my letters referencing the same debt. The debt was barely over $700, but I got letter after letter that said the exact same thing. I continued getting these letters for months and after a while, I began to ignore them because I sent in a check for payment of the debt. What I didn't know was that the letters were no longer referencing the original $700 omission, but now they were demanding payment for a debt in excess of $70,000. I only became aware of this debt when I got a certified letter informing me of a levy filed against me.
The IRS does make mistakes
In all fairness to the IRS, they are still human and prone to make mistakes just as you or I would. When I received the information from the IRS stating that I owed over $70,000, I initially thought that the numbers might be correct. After spending time reviewing my trades, I began to suspect that the data the numbers that they calculated were very high. My tax omissions covered a period of 5 years and I painstakingly reviewed all the data. When I finished, I came to the conclusion that the IRS was no less than $20,000 high on their calculations.
The IRS doesn't want to destroy your life
When I found that their numbers were at least $20,000 high, I dreaded calling them. I looked for any other option that would allow me not to talk to them. When I finally called, they were friendly, accommodating and very helpful. After working with an IRS official, we came to the conclusion that my tax debt was actually $30,000 lower than the initially requested $70,000. With a dramatically lower income than when the tax debt was accumulated, paying $40,000 was simply not within my means to pay. The representatives there worked with me and helped me with potential options for relief of the debt.
There are ways to get relief from IRS Debt
It is a common belief that once you get tax debt that it will follow you and haunt you for your entire life. If you're simply unable to pay it, there are ways to get out of the debt. Contrary to proper belief, you can file chapter 7 bankruptcy on tax debt and potentially have the debt written off. This was on option that I researched when looking for a way to resolve the debt. Ultimately, I provided the IRS with a financial statement that basically took into consideration my current income and expenses and provided a payment plan that was affordable. This plan also reduced my total IRS debt, thereby providing me with a financial future. In the end I gained a new found appreciation for the IRS and its employees, but hopefully I will never have to talk to them again.
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