Problems–life problems–can happen to anyone. When I met Richard, he was in serious trouble with the IRS. He had made a mistake many years earlier.
The first thing I do for clients facing a wage garnishment is to make sure that the client actually owes what the IRS says they do. The second thing I advise clients about is how to pay down the debt: it’s best to pay the IRS debt down as soon as possible, depending on the client’s finances. Sometimes, when all the returns are filed and the liability is lowered, we find out the client has paid their full tax bill and an IRS refund is owed.
A man who ran his own business came to me in a panic after the IRS notified him of an audit. The IRS said he owed many thousands of dollars. Not only that, my client told me frankly that his records were a mess.
I had a client recently who had not filed a tax return in eighteen years. He also did not have a checking account for 20 years. His was a life lived “underground.” But then he took a W2 job and the IRS caught up with him.
The #1 fear of people with tax problems–whether it’s an unpaid tax debt or years of unfiled tax returns–is that the IRS will seize their house. In fact, the Taxpayer’s Bill of Rights discourages seizure of a primary residence. However, a taxpayer must show an attempt to pay.