Top Things to Know When You Owe on Tax

Tax Tips by Rosa McAllister
January 26, 2022
US dollars with clock individual tax form

When you owe taxes to the Internal Revenue, you feel a heavy weight from the uncertainty of what’s ahead. In addition to feeling stressed, you’re concerned with the consequences of delaying payment and what this might mean for your finances or your business.

Our primary advice: Don’t panic but address the problem head on.
Don’t ignore the notices you receive from the Internal Revenue, and don’t bury your head in the sand wishing this problem would just go away. It won’t – at least not without your attention. Keep in mind that thousands taxpayers have come before you and found a way to pay, and many more thousands will come after.

At World Tax Accounting, we hear you and understand the fear and frustration that comes with tax difficulties. In addition to staying calm and addressing the problem, here are some other things you should know when facing this challenge:

Delaying and avoiding the issue can cost you

Sometimes life happens and you fall into financial hardships. Instead of paying the tax bill, you end up delaying the payment and the longer you delay often worsens the situation.

Delaying and forcing to move forward (or attempting to avoid the issue altogether) will result in more interest and penalties accumulating on your total debt. When faced with taxpayer inaction, the Internal Revenue can become quite aggressive. It’s in your best interest to avoid any delay and begin working toward a settlement or payment process. Doing something is always better than doing nothing.

Your chances of a better outcome increase when working with a Tax Pro

For a variety of reasons, some taxpayers opt to navigate the Revenue system on their own and feel confident they can manage everything themselves. If this sounds like you, hopefully, you can consider these few benefits. Working with a qualified Enrolled Agent can reward you in several ways; not only with your hassles, worry and frustrations be reduced, but in many cases your settlement or financial outcome will be better, too. In the case of submitting an offer in compromise, working with a tax professional that’s familiar with the process and knows all requirements will significantly increase your chances of winning approval.

While reactions to owing in the Internal Revenue can vary, it’s fairly typical for taxpayers to feel some level of worry and concern. However, understanding the issues can help ease the minds of those in this worrisome situation. Above all else, remember that owing in the Internal Revenue is not a moral failure. Running a business and a family household (or both) can be difficult and no one can expect everything to go smoothly all the time. At World Tax Accounting, we understand this, and we can help.