Tax Debt Resolution Facts

Posted on April 24, 2023

Tax Debt Resolution Facts

There are certain myths connected with tax debt that often lead taxpayers into further complicating their tax issues and paying more than what is required. One prominent myth is that the original tax debt amount remains the same over time. The fact is, from the day the taxes are due, usually April 15th, the IRS charges penalties and interest on the amount owed.

Each month that the tax debt remains unpaid, the IRS charges penalties and interest. The total amount of back taxes grows with each month of non-payment.

Another myth is that if you cannot afford to pay your total tax debt, you should not file or pay any of your taxes. If you are legally required to file and/or pay taxes, then even if your financial condition does not allow full payment of the taxes, you are still legally required to file. In such cases, it is best to seek advice of a tax professional to understand how you can resolve the case while attracting the least amount of penalties and interest. Make sure that you seek help before the filing deadline, because after the deadline, the IRS begins to treat unpaid taxes as tax debt, and will charge daily penalties and interest on the unpaid amount.

When faced with tax debt, it is recommended that you consult a tax professional in order to receive the best possible resolution, and pay the least amount required. Remember, an early resolution to tax debt is highly beneficial even when you are not able to pay the tax debt in full.

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