Top Things to Know When You Owe on Tax

January 26, 2022
US dollars with clock individual tax form

It’s what most every taxpayer dreads: Despite your best efforts, you find yourself owing money with an inability to pay the debt immediately. In addition to feeling stressed about the money you owe, 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 you owe, 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.

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

Delaying moving forward with a problem (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 right away. 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, it will change your mind. Working with a qualified Enrolled Agent can reward you in several ways; not only will 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 above issues can help ease the minds of those in this worrisome situation. Above all else, remember that you’re not alone, and 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.