Never Tell the IRS "Things Will Get Better Next Year"

Many people who are in financial distress are incurably optimistic, fervently believing their situations will improve within a year and they'll be able to pay off all their debts, and then some. While this can be an admirable attitude—and it is preferable to simply giving up and resigning yourself to sinking deeper and deeper into poverty—it's also one that is best left unexpressed to your creditors, especially the IRS.

The fact is if the IRS comes after you for a back tax bill, the revenue agent assigned to your case won't be impressed by your “the sun will come out tomorrow” attitude. Instead, he may think you simply are trying to put him off, and are feeding him the same line you've already fed to your other creditors. This agent probably already knows more about your finances than you would be comfortable with, and that old piece of financial boilerplate, “past performance is no guarantee of future results,” certainly applies to this situation.

Look at it this way: even if you have ample reason to believe your circumstances will improve soon (say, your grandmother is ailing and you're expecting a big inheritance), why would you want to clue-in the IRS to this fact? The agent may choose to confirm your “grandmother” story. If the facts bear out, he’ll make a note in your official record that you'll be receiving such-and-such a windfall when she dies. Not only will they then seek to collect your back tax bill, plus penalties and interest in full, but the IRS also will keep a close watch on the taxes you file on your inheritance!

Bottom line: the IRS is interested in what it can extract from you now, not in six months, two years, or even a decade from now. For questions, call the Oklahoma tax advisors at Travis W. Watkins, PC (800-721-7054) for a free consultation today.

Be the first to comment!
Post a Comment