Robert J. Fedor, Esq., L.L.C.

How to rebound from tax debt and tax troubles

Most Ohio residents can likely relate to procrastinating at home or work at some point. While cleaning the house or submitting a monthly expense report are important, putting such tasks off likely won't lead to hefty fines or criminal charges. When it comes to procrastination and taxes, however, failing to file or pay taxes can result in just that.

In recent years, many Americans lost jobs and fell on difficult financial times. These types of difficult life circumstances often have a way of snowballing. A job loss leads to credit card debt which results in a home foreclosure. An impacted individual starts to drink more or turns to drugs to escape the everyday burdens and memories of how life once was. Paying taxes is likely one of the last things on the mind of an individual facing this type of dire financial and personal situation.  

Individuals who failed to file taxes or owe back taxes often feel overwhelmed and ashamed. In many cases, individuals who fail to file tax returns one year think they can never rectify the situation or file a tax return again without effectively getting "caught". The fact is that most individuals who fail to file tax returns or pay back taxes do indeed get caught. Individuals who are facing this type of situation would therefore be wise to consult with a tax attorney who can provide advice on how to proceed.

In many cases, the IRS is willing to work with delinquent tax filers and payers who come forward and admit errors. The first step is often filing all tax returns, calculating tax debt and working with the IRS to determine a payment plan. In some cases, individuals in dire financial situations may be able to negotiate the total amount of tax debt owed.

Source: Reuters, "Coming clean on your taxes," Amy Feldman, May 14, 2013