Myth #2: Even if You Accrue and Keep Adding Debt—the IRS Will Let You Resolve the Situation

Perhaps you think the IRS will be desperate for you to make a payment and eager to accept a simple resolution, but this is far from the reality of dealing with the IRS. The IRS can be aggressive and relentless in collecting your tax debt, and they want the total amount, with penalties and interest. It isn’t in the IRS’ best interest to cut in-debt taxpayers a break after years of non-payment, and allowing you to resolve your situation with a slap on the wrist sets a percentage of leniency that the agency cannot afford. Here, we will discuss why the IRS doesn’t budge on tax debt, the penalties you face as you continue to grow your tax debt, and how Highland Tax Group can help you.

What Are the Penalties for Accruing Years of Tax Debt?

The IRS will not budge on requiring you to pay your tax debt; moreover, you will face more than just the original amount you owe. At a minimum, you will face failure-to-file and failure-to-pay penalties, which accrue compounded daily interest the longer they remain unpaid. The failure-to-file penalty is generally 5% of your unpaid taxes each month you fail to file, maxing out at 25% of the total amount owed. The failure-to-pay penalty is a fine of 0.5% of your unpaid taxes for each month they remain unpaid, also capping at 25% of the total amount.

If I Can’t Negotiate, How Can I Resolve My IRS Debt?

Reaching out to the IRS and acting like your tax debt is no big deal, or even providing what may be a valid and heartbreaking explanation as to why you have been unable to pay won’t get you very far. While individual workers at the IRS aren’t heartless, they cannot negotiate with you to reduce or forgive your debt.

The first step to resolving your IRS debt is to contact an enrolled agent. Enrolled agents are tax professionals who have met the rigorous qualifications needed to represent taxpayers before the IRS. The enrolled agents at Highland Tax Group will assess your case, including your tax debt and current and predicted financial situation. We will then present you with realistic payment plan options and likely outcomes from working with the IRS. You cannot resolve your tax debt with the IRS without a payment plan. We are here to make your life easier during this overwhelming experience. Contact Highland Tax Group today for assistance.