Tax debt and anxiety go hand in hand.

Losing sleep at night goes right along with it.

But what causes tax debt and, importantly, what can you do about it?

Let's break it down.

I've seen so many taxpayers go through it that I know exactly how you feel.

I understand why people stick their heads in the sand.

Trying to take tax debt head-on feels overwhelming, intimidating, and even shameful.

But here’s the reality: waiting to address tax debt only makes things worse, not better.

They’re BACK!

After laying off for the 4 years during and after the pandemic, the IRS is finally sending out LT11 notices again also known as the “Final Notice of Intent to Levy”.

This is no ordinary letter.

It's not one of those "Reminder" notices.

The IRS has introduced new features in its online self-service tool called the Business Tax Account (BTA).

Launched as part of their commitment to service improvement under the Inflation Reduction Act, the new BTA features make tax management easier for both businesses and tax professionals.

The IRS is an asshole.

It’s Friday and it's payday and you look at your bank account expecting to see all the money you need for the next two weeks but instead you see that your paycheck is A LOT smaller than it should be.

The IRS took your money before you even had a chance to do something about it.

This scenario is a real possibility for taxpayers with IRS tax debt.

Let’s talk about it.

With payroll taxes, the IRS is always lurking.

The code is impossibly complex and as a business owner, you have SO much to do. You're juggling employees, business operations, quality control and about a thousand other things. And that’s why many business owners find themselves payroll tax debt problems.

Imagine this: You sign off on and file a joint tax return with your spouse, trusting the numbers your spouse provided. Before you know it, the IRS has audited the return, found that your spouse hid income and now they’re after you for a tax debt you had nothing to do with.

It feels completely unfair.

And you do have an option.

In 2023, the IRS assessed $7 billion in estimated tax penalties, almost four times more than the amount in 2022.

IRS penalties for not paying enough in estimated tax payments have become huge.

What used to be a penalty of about $150 in 2022 has jumped to an average of $500 in 2023. The number of taxpayers that got stuck with under payment penalties increased by 2 million year over year.

After last week's article in my weekly newsletter, Resolving Tax Debt, do you think it still might be a good idea to take on the IRS by yourself?

Spoiler alert: it's not.

I'd like to stop this article right there after "it's not," but my director of PR (me), is telling me you can't just post that and give no further explanation.

But really, wouldn't perform your own root canal...would you?

And here's why.

The IRS is a powerhouse, equipped with all the tools necessary to make your life miserable if you owe them.

But when it comes to negotiating back taxes, many taxpayers adopt the "head in the sand" approach, hoping that by ignoring the letters, the problem will vanish.

🔥🔥🔥The Supreme Court is on Fire!

The USSC is knocking out decisions left and right, significantly effecting the world we live in.

This week, the US Supreme Court delivered a decision with far-reaching implications for federal agencies, including the IRS.

But what does this ruling actually mean for us as tax professionals and taxpayers?

As of April 2024, it's taking the IRS over 22 months to resolve identity theft cases, with approximately 500,000 cases unresolved.

According to the latest National Taxpayer Advocate report to Congress, ”Recent reports reveal that these delays are not just inconvenient—they're downright "unconscionable."

Yikes.

Missed the April 15th tax deadline?

You’re not the only one.

Americans accrued $7 billion in tax penalties in 2023, a record-high level and a  nearly 300% increase from 2022.

If your business owes payroll taxes to the IRS, there’s a damn good chance you’re going to end up being personally liable.

When you own a business, you’re required to take FICA taxes from your employees’ paycheck. You have to keep your share and your employees’ share of FICA taxes in a trust and later pay the taxes from the trust to the IRS.

The IRS is loaded with cash and ready to roll and audits are the focus.

Yea, the IRS was supposed to get $80 billion and now they’re not but they still got $60 billion (although it may shrink even more) over 10 years in addition to its annual funding.

It’s still a VERY decent chunk of change, which allows the IRS to make lots of changes to many aspects of its operations but especially its audit department.

Here's what you need to know:

“Sorry, you can’t go through. Your passport is denied.”: Those are the LAST words you want to hear as you are about to fly internationally for a work assignment in London or a relaxing trip to Mexico.

When you have tax debt, you’re potentially putting yourself in that situation.

Working with the IRS is a nightmare.

Long waits, agents that don’t know what they’re doing, “courtesy” disconnect— it’s about as fun as having a tooth pulled.

But new technology is on its way; some of it is already here, which should make dealing with the IRS at least a little less painful? Hopefully?

Let’s talk about what’s coming.

Have you ever felt that the IRS treated you unfairly?

Have you ever felt the IRS has too much power when it's making decisions?

If so, there’s a path to justice that doesn’t involve courtrooms or exorbitant legal fees - it’s the IRS Independent Office of Appeals.

By appealing to an impartial third party, the appeals process is your strategic tool to challenge and potentially overturn IRS decisions.

Let’s delve into why understanding and navigating this process is crucial for taxpayers in a dispute with the IRS.

The IRS got a whole bunch of money from the so called “Inflation Reduction Act,” to target "the wealthy," but a recent audit by the Treasury Inspector General for Tax Administration (TIGTA) found that IRS audits still unfairly targeted the middle class despite assurances from the IRS that they wouldn’t.

🚨 Accountants Alert: The IRS is gearing up for a major overhaul in tax enforcement, targeting the wealthy and large corporations. By 2026, audits for households with incomes above $10 million will increase by 50%, and corporate audits are expected to almost triple.

If you're an accountant, and you serve high-income taxpayers, this is what you need to know to keep your clients in compliance.