Simply hearing the words IRS strikes fear into the hearts of many Americans. Scam artists capitalize on that fear and frequently claim to be IRS agents in an attempt to extort money from unsuspecting citizens.
Their threats often include arrest if the victim does not immediately turn over the requested amount of money. Because of the stereotype of the IRS and its agents, these scams are often successful. The following are three common IRS myths that you may have been tricked into believing.
This year’s tax return shows a balance due. And with all of the expenses, saving for the kids’ college, and the surprises that pop up at the wrong time, you do not have the funds to pay the total. Just remember that while the IRS can have criminal charges filed against you for cheating on your taxes, very few taxpayers end up going to jail for their IRS debt. That being said, if you find yourself owing more than you can repay, there are a lot of options to help you resolve your tax debts.
Rest assured that the IRS does not exist to torture taxpayers. Despite their reputation and portrayal by law firms looking to find desperate clients, the IRS has options for paying off tax debt. Taxpayers can enter into installment agreements and pay their taxes over time. Keep in mind that these agreements include penalties for paying the taxes after their due date and interest on the outstanding balance.
Other programs exist for special circumstances and can reduce or eliminate the amount of tax due (TaxProEZ). More information on these plans and programs can be found on the IRS website. You can also find phone numbers and addresses to assist you. Still intimidated? Contact an accountant or tax attorney to assist you in contacting the IRS and paying off your tax debt.
The best advice, should you find yourself in a situation with the IRS, is to address the issue promptly. The IRS communicates primarily through the regular mail system and provides taxpayers with notice of problems (CNN Money). These notices should never be ignored. Even if you believe the correspondence to be in error, you should contact the IRS immediately to verify and correct any problems before they are out of control.
Many American people have a fear of the IRS. That fear often leaves them to fall prey to scammers. But, by honestly preparing tax returns and addressing any issues as they arise, taxpayers have no need to fear. For more information on debt and good debt paying habits, check out our blog.