Tax Debt and Tax Problems

Tax debt and general tax problems will not go away on their own. You can not sweep them under the rug with other financial problems through bankruptcy. Tax debt must be dealt with head on and the sooner that you contact the IRS to work out your tax problems then the easier the path to restoration will be for all involved.

Myths about Tax Debt

* Tax debt can be rolled into a bankruptcy – it seems to make sense. Bankruptcy is designed to roll your debts into a manageable number. Tax debt is not a figure that can be included. Even after the dusts settles from your bankruptcy proceedings you will still owe the IRS your tax debt. It is important to work with a lawyer that specifically understands the working of the IRS to be able to work out tax debt when working out a bankruptcy.

* Interest and penalties stop once you start working out the tax debt with the IRS – unless the IRS tells you (and it is always important to get changes in your case in writing) that they will wave the interest and penalties then assume interest and penalties on your tax debt are continuing to increase.

* The IRS can come after me for back taxes and tax debt for the rest of my life – the IRS is unquestionably one of the scariest entities in the Federal Government but there are limits to its power. For most circumstances, tax debt and back taxes are only collectible for ten years.

There are so many rules and regulations when it comes to the IRS and the tax code that it is usually best to work with a tax professional. The right tax professional can help guide you through the maze of code that will eventually lead you out of tax debt and tax problems with the IRS.