If you have unpaid taxes, it might be tempting to procrastinate, and avoid addressing the situation until April. However, it’s important to remember that debt negotiation with the IRS is different from all other kinds of debt negotiation. It’s highly advised that you at least make an effort to address any unpaid taxes now rather than later.
Reasons to Initiate Contact
Essentially, most debts can be forgiven in bankruptcy. Whether it’s a mortgage, business loan, or credit card bill, bankruptcy of one kind or another can get rid of it. However, it’s not the same story with federal taxes. Unpaid taxes must be paid. True, you can work out a debt negotiation agreement with the IRS through an installment plan or the Offer-in-Compromise program. However, there’s no complete debt erasure.
Also, the IRS is cracking down on tax fraud, evasion, and even honest bookkeeping mistakes. If you owe the IRS back taxes, and you know it, your best option is to initiate conversation. In a down economy, the IRS is looking for all the unpaid taxes that they can collect. Eventually, your records will be pulled. Go ahead and begin the conversation about your unpaid taxes now, and you may have fewer/lighter penalties!
Also, hiring a processional tax attorney can be a big help during this time. A tax attorney can advise you on the best way to go through the debt negotiation process. If you’re concerned that you may have unpaid taxes or tax issues that you don’t understand, hiring a tax attorney can be a good way of insuring everything gets addressed!