Question: I just found out my husband didn’t submit our income taxes this year. He got laid off and I got furloughed one day a week at my job, so apparently, he just decided to skip a year. I’m really afraid the IRS is going to come take our car or our home, but my husband says not to worry — the worst that will happen is we’ll get audited, and even that’s pretty rare.
I love him, but in this case, I don’t trust him. When I search the Internet, I get lots of conflicting information. What’s the truth, Mr. Dvorkin?
— Liz in Georgia
Howard Dvorkin CPA answers…
The IRS isn’t like grade school: You can never skip a year. The IRS can indeed seize your property and assets with powerful weapons like a federal tax lien and a bank levy. It may take some time before the IRS catches up to you and your husband, but trust me, it will.
Perhaps no financial problem I deal with on Debt.com is more serious than tax debt. While credit card debt has many paths to financial freedom — consolidation, debt management, and credit counseling — your options with the IRS are much more limited.
Before I recommend (actually, insist upon) a course of action, please read What is Tax Debt? This brief report is sobering, especially with numbers like this: “At most, the IRS can charge a 25 percent penalty on the total tax debt amount.”
If there’s any good news here, it’s this: The IRS doesn’t want to use the scary weapons it has in its arsenal. If you work with them, they’ll work with you.
While Debt.com offers self-help advice like Do-It-Yourself Student Loan Consolidation, tax problems have such serious consequences, I urge you to consult a professional. You can call Debt.com at 1-888-472-0365 for a free consultation with one of our tax experts, but if not ours, call someone. Make sure they’re a tax attorney, not just someone hanging out a shingle and purporting to have tax experience.
The good news, Liz, is that if you act now and tell the IRS what’s happening before they come to you, a good tax debt service can really help you, and they can do it fast. Whatever you decide to do, don’t wait any longer to do it.
Have a debt question?
Email your question to email@example.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.