The Top 5 Misconceptions About Tax Debt Resolution

Tax debt resolution is a lifesaver when you're in dire financial straits with the IRS. Yet, this field, vital as it is, faces a ton of misconceptions.

These myths deter taxpayers from seeking help, exacerbating their tax woes.

In this article, I take on some of the most prevalent misconceptions about tax debt resolution, emphasizing the importance of seeking expertise under any circumstances where you're facing tax issues, and the inherent benefits of involving a tax debt lawyer in the resolution process.

Debunking Myths and Setting the Record Straight

1. "Tax Debt Resolution is Just About Settling for Pennies on the Dollar": The Offer in Compromise program CAN help you settle for less than they owe, but it's not the 'norm'. Most don't qualify for an OIC but there's a ton of other options for you if you can't pay your balance.
2. "The IRS Will Eventually Forget About My Debt": They won't. The IRS has ten years to collect from you. Interest and penalties continue to accrue, and the IRS maintains the ability to collect from you...aggressively. Haven't heard from the IRS in five years? You're not home free. They have five more to come after you, and the likelihood is that they will.
3. "If I Can't Pay, There's Nothing I Can Do": If you believe you're at a dead end if you can't pay your balance, you're mistaken. The IRS offers multiple programs if you're facing a financial hardship, including but not limited to Offer in Compromise, Partial Pay Installment Agreements, Temporary Holds, and more. Don't stick your head in the sand. You have options.
4. "Hiring a Professional is Too Expensive": Do not try handling your tax issues by yourself to try and save money. You won't and it will not end well. You don't know what you don't know. Without understanding the tax laws and IRS procedures, you'll end up paying more than necessary and miss the opportunity to end up with a better outcome.
5. "Tax Debt Resolution is a Scam": It certainly can be. Unfortunately, there are too many companies in the tax debt industry looking to take you for a ride. Talk your case through with a reputable tax debt lawyer or ask for a recommendation to ensure genuine assistance.

Why Tax Resolution is Not Just for 'Big' Cases

The notion that tax resolution is reserved for huge tax debts is incorrect.

Here's why:

1. Small Debts Accumulate: A seemingly manageable debt can rapidly balloon with accruing interest and penalties. Addressing it early on can prevent it from becoming a 'big' case.

2. Prevention of Aggressive Actions: The IRS will enforce collections including levies or garnishments even with smaller debts. Timely resolution stops these IRS aggressions.

3. Maintaining Financial Health: Tax liens in any amount will impact credit scores, hamper loan approvals, or disrupt financial plans. Resolving your tax debt ensures your financial well-being.

4. Peace of Mind: The psychological burden of owing money to the IRS can be overwhelming. Resolution provides internal calm, relief, and peace of mind.

TL;DR

There are myths about tax debt resolution which are easily debunked:

1. An Offer in Compromise is not the 'norm'. There are many other options.
2. The IRS will not just "forget" about your tax debt. They want their money.
3. The IRS offers many programs. You're not out of luck if you can't pay in full.
4. Hiring a Tax Lawyer is not too expensive. It's actually less expensive. You risk paying higher debt and a less favorable outcome without representation.
5. Tax Debt Resolution is a Scam. Find a reputable attorney. Find a referral.

Additionally, Tax Resolution is not just for big tax debts.

Here's why:

1. Small Debts Become Big: Tax debt balloons with interest and penalties.
2. Prevent Enforced Collections: A tax attorney can hold off an aggressive IRS.
3. Maintain Financial Health: Outstanding tax debts disrupt financial plans.
4. Peace of Mind: IRS debt is overwhelming. Resolution provides peace of mind.

It's important to understand the reality behind common tax resolution myths.

Seeking the expertise of a tax debt lawyer can make the difference between financial downfall and financial freedom.

There are misconceptions abound, but with the right knowledge and professional guidance, tax resolution is a beacon of hope.

Thanks for reading.

Stephen A Weisberg