No one likes to think about owing the IRS money. If you rightly shudder at the proposition of facing a massive tax debt, you are certainly not the first. Scraping together the necessary funds to satisfy a delinquent tax balance can overwhelming and, in some cases, virtually impossible.
There are, however, additional concerns that can accompany your tax debt beyond the financial burden. These issues involve a certain degree of embarrassment from steps the IRS can take to ensure your balance is paid. Consider some of the more humiliating situations that can result from an unresolved tax debt before deciding to ignore it.
Notices in the Mail
Whether or not you're on a first-name basis with your mail carrier, you can be certain that they see their fair share of IRS notices. If one arrives in your mailbox, you run the risk of having your neighbors, roommate, children and spouses learning about your problem. And while you likely want to keep your partner in the loop regarding debts with the IRS, concealment becomes increasingly difficult when notices begin arriving.
Imagine walking into the bank to inquire about a loan, only to learn that your credit has a serious problem: a federal tax lien is in place. The IRS can opt to place a lien against you when you have a tax debt, which informs creditors that your tax balance takes priority over any other debt. This has the effect of laying waste to your credit, making it improbable you'll secure even a new credit card. Additionally, tax liens are a matter of public record, meaning anyone who cares to look can find out about your IRS issue.
New Employment Complications
An additional and troublesome feature of tax liens is their ability to impede your employment prospects. Some employers will perform a credit review as part of a background check. This can obviously complicate your candidacy or, at the very least, present you with an uncomfortable conversation. Many security-based positions actually require a clean bill of credit health for new hires. Worst case scenario, you may find your prospects dashed as a result of your tax lien.
Current Job Problems
If you disregard your tax debt for long enough, the IRS can take some aggressive action against you. This includes garnishing your wages. Your employer will be instructed to hold back a percentage of your paychecks to be applied to your delinquent balance. This can create obvious discomfort between you and your employer, who now has first-hand knowledge of your tax trouble.
Your Friends and Neighbors
As if notices weren't enough, the IRS may eventually show up in person. In some instances, a revenue officer may be assigned to track you down to resolve your tax balance. This process may include visiting your last known address or relatives in order to locate you.
The best way to avoid a shameful scenario is to address your tax debt as quickly as possible. Any IRS notices should be responded to immediately and your balance should be paid promptly. Even securing a formal resolution with the IRS can help you prevent any unwanted attention. Consult with a licensed tax professional to determine which option is going to preserve your money and your dignity.