You know that feeling. The sinking in your stomach when you think about one of the worst things that can happen to you in your personal finances: You owe the IRS money for back taxes.
You keep asking yourself how you got into this situation. But all you get is ugly facts surrounding a situation of desperation. It is not all that difficult of a place in which to find yourself. A failed business, marriage or other personal calamity contributes to financial pressures and before you know it, you are in debt to the US Government.
Here are some things that you can do to help your situation and hopefully calm your nerves.
The IRS is like you. Believe it or not, the people at the IRS are not monsters. In fact, they are more open to speaking with you about your situation than you realize. They deal with situations like yours (and far worse) every day. So, do not think that your contacting them will cause them to faint or become angry with you. They do not operate that way, and will help you get through this issue.
Communicate right now. Do not put off calling or contacting them about your situation. The more you put it off, the more it will cost you in interest and penalties on what you owe. They will appreciate your forth-right attitude, also, in coming to them to work something out. This will not be the end of you. You will not go to jail. But, neither should you shirk your responsibility, because that can and will get you into deep trouble with them.
Work out a payment. The IRS will sit down with you and work out payment arrangements to which you will have to adhere in order to pay back what you owe them plus interest and any penalties. Sometimes they do this via the mail and phone. You might not even have to visit an IRS office. They are aware of what you owe, and will give you the opportunity to begin to make payments to them.
Stick to you payments. Do not fail to make your payments on time to the IRS. This is one organization that has the teeth to get their money. If you violate the terms of your payment arrangements, they will begin to attach and seize property that you own, including bank accounts, etc. However, if you speak with them in the event that you are having problems making your payments, you will be able to work through it.
Beware of bad advice. We have all seen those television commercials where someone who claims to having once been an IRS employee can get your IRS debt settled for pennies on the dollar. Each person’s circumstances are different and just because someone else had a major portion of their back taxes wiped from their record does not mean that you will have the same experience. If you choose to contact one of these businesses, you might want to contact the IRS first concerning that company. They know what they are willing to do and who they are willing to work with. Besides, it is YOU who owes the money to the IRS, not some talking head on television.
There is only one thing worse than paying taxes at all and that is paying for back taxes owed. It is not a fun place in which to be found but neither is it an impossible situation. Work through it with patience and persistence and it will be a distant memory before you know it.