If you are facing extensive tax debt, then you will face consequences. Getting to know what these consequences are can help you avoid them.
The Compounding Interest
One of the first issues you will face is the interest that will continue to pile up. The interest will vary based on if a tax return has been filed. However, regardless of the situation, it is going to add up and this can result in thousands of dollars in additional fees.
Collection Efforts by the IRS
The next issue you will have to deal with is the collection efforts by the IRS. If you have unpaid back tax debt, then it may result in you facing an IRS audit. That means you have to jump through countless hoops as various government agencies look through all your business or personal financial records from current and past tax years.
The Psychological Impact of Unpaid Tax
When you are facing large amounts of tax debts, it can take a toll on you personally. While your friends and family members are planning fun vacations and purchasing all types of new gadgets and vehicles, you are going to be stuck in neutral-from a financial standpoint.
The Affect on Your Professional Life
Another factor that you may have to face is that unpaid tax life can affect you professionally. For example, back tax debt recently led to (non-client) John Kolego's law license being suspended for up to three months. He had amassed over $400,000 in back tax debt. Do you wonder how his total got this high? He failed to deduct federal taxes from his worker's paychecks and he never paid his employees' taxes that were due to the government. Additionally, he didn't file tax returns for several years between the 1990s and the 2000s.
Unfortunately, these professional consequences don't just affect attorneys. Other professionals may have their licenses suspended, too-including hospital staff, contractors, car salesmen, salon workers and more. If a tax lien is issued and you try to renew your professional license, you will be denied and out of work.
What's the Solution?
The best solution is to avoid owing back taxes, so you don't have to worry about a lien. However, if you are facing this situation, a well-informed tax law professional can help you achieve lasting improvements in your financial health. If you are being levied, have a lien, being audited, or have unfiled tax years there are many options that we can provide to give you a food night's sleep again. Having the feeling of being underrepresented is a struggle of itself, Call Travis W. Watkins Tax Resolution and Accounting Firm for your Free consultation at 800-721-7054.