I start off quite a few of my articles with some sentiment about the IRS being a frightening entity. I do that for two reasons: one, it helps people know that they’re not alone. When the IRS comes knocking, it’s perfectly normal to feel overwhelmed and have a, “I have no idea what to do,” kind of moment. I want people to know that what they’re feeling is perfectly normal given their situation. Secondly, it works as a reminder for me that without all of the experiences I’ve had dealing with the IRS, I would be just as anxious.
After helping clients through a thousand different scenarios, I think I’m qualified to help you decide what’s going to have the best outcome. Do you know what’s never going to be in your best interest? Answer: hiding from the IRS. Closing your eyes and hiding under a blanket is going to do one thing and one thing alone – it’s going to drive you insane. Just waiting for the IRS to come knocking is almost always worse than dealing with the problem head-on. So let’s rip off the Band-Aid and put the IRS in their place!
The worldwide tortoise
You know the story of the tortoise and the hare? Well, it turns out that the lessons you learned from Aesop’s Fables keep making sense even as you get older. When it comes to taxes for US persons, you are the hare and the IRS is the tortoise. You might be able to get a running head-start and evade them for awhile. But, despite their plodding pace, they’ll eventually catch up. And when they do, losing the race is a very real possibility.
Not only that, but this tortoise isn’t locked to land or sea. Matter of fact, this tortoise can follow you to the ends of the universe. The IRS has the ability to collect, fine, and prosecute any US person anywhere in the known galaxy. I imagine the second person to Mars will be an IRS Agent there to audit the first person to land.
The IRS moves slow. That’s why I love using the tortoise and the hare as a reference. They move so slow that sometimes it seems they’re not moving at all! So many people are able to ignore the IRS for years – even decades – because the IRS moves so slow. But so many of these same people can’t ditch their stress because they’re afraid any moves they make towards resolution are going to blow up in their face.
Just do it
Just rip the darn thing off and let yourself breathe! In a grisly, future-sucking fashion, you’re not letting your your financial wounds any chance to heal if you don’t let them out in the air. Yikes, that is rough. But that’s the nitty gritty of the situation. If you want to start the healing process, you need to be open with yourself and with the IRS.
There’s more than a few voluntary programs (i.e., domestic voluntary disclosure and OVDP) designed for people who want to come forward and fix their problem. When prospective clients come to me, I always make sure that they’re ready to stop hiding, fix the initial problem, and move on with their lives. For so many people, their first instinct is to move forward hesitantly. Being wary is good, but moving forward with purpose is infinitely better. By taking the first steps and admitting to yourself that you need to fix your problem, you’ve ripped the Band-Aid off. Now it’s time to get your life back under control.
What do I do?
Here’s where I get to be the bearer of good news! The IRS is not invincible. By coming forward on your terms, you’re showing them a sign of goodwill. You’re telling them, “Hey, I want to fix this problem.” And I promise you that they respect that a lot more than the person they’ve had to track down. So that’s a negotiating chip right there! Right off the bat we can get you into a program or develop a strategy that’s going to help you solve your problem effectively and efficiently.
Second, learn what you can. Knowledge is the best way to combat fear. The less you know, the more worried you are going to feel. Your imagination can be a wonderful friend, but it can also spin small problems into massive ones. Learn what you can about your particular problem and what options are available.
As always, if you find yourself becoming overwhelmed, talk to a tax professional. We spend our entire lives helping people sort out their problems with the IRS. I promise you that solving the problem on your own terms is a hundred times better than waiting until the IRS finds you out. Stand up strong, find someone to fight for you, and I’m positive you’ll sleep better at night.