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Tax debt

Picture of Tax Debt Tax Debt, I’ve been seeing a lot of these commercials wanting you to hire them to settle your tax debt for way less than you owe. I recently found myself owing a tax debt and was considering calling one of these companies I saw on television, I’m sure glad I didn’t. I owed what would be considered a small amount around $4,500 bucks. I lost my job in April of 09’ and didn’t have the money I knew I would owe to the IRS, so I simply didn’t file my 08’ return. I knew I wasn’t going to go to jail or be prosecuted for not filing people die every year and never file taxes again.

If the IRS chased down all the people who didn’t file they’d be wasting too much time and resources. The way they get you is when you do file your taxes again, then all the sudden it’s hey what happened to all these other years you didn’t file your taxes, and I knew that so when I filed I knew I better be prepared to complete those prior years of tax filings. So I filed my 10’ taxes and sure enough I got a letter wondering about the other years and they were holding my 10’ return till I filed them. I filed the other 2 years returns and they adjusted the money I was expecting accordingly, so I thought, and I got a refund for about $4,500, me and the wife cashed it, spent it and thought it was over.

Problems arise

Not quite, I got a letter, they didn’t quite get all the money to satisfy the 08’ taxes, and I later found out after calling accidentally sent all of my 09’ refund and that’s what me and the wife got and spent. So there was $1,700 bucks that was still needed and they attached late fees penalties, interest, everything they could imagine, which totaled $4476, I thought it was a mistake, so I ignored the letter, I figured it was just an error on their part. I got another letter and thought maybe this isn’t a mistake, well I don’t have any money to give them, so I didn’t call, I’ll straighten it out next tax filing. I got a third letter this time certified mail, uh oh, they’re going to try to levy taxes, I thought that’s cool, that’s my plan anyway, take it out of next years taxes when I file.The next thing that happened was I had a voicemail from a guy wanting me to contact him about a court ordered wage garnishment, now I was like, I’ve got to call the IRS and fix this somehow.

Simple solution

I called the toll free number given on the notice I received waited for the usual 15 minutes till I got a live person, explained my situation, lost my job, sporadic employment, wife and kids, food stamps, no extra money to spare and just then I asked these magic words “is there any way to reduce the penalties and interest?” and just like that got all the penalties and interest taken off, I owed them only 1,700 bucks now, they could take $76 monthly payments starting November 28th till I filed taxes next year and the balance due was paid off. That was it! It only took me about 35 minutes total to do it all. Now I know why these places and ads are popping up everywhere wanting to help you settle your tax debt, it’s easy they create these ads trying to instill fear in you of the all powerful IRS that can do all kinds of horrible things to you, wage garnishment, bank levy’s, seizure of property and liens, and yes they absolutely can do all of those things, where it’s deserved. But, for most of us who simply make a mistake or lose a job and can’t fulfill our tax obligations, it’s simply a matter of explaining your situation to them and communicating.