There are a lot of Common Tax Questions and Tax Debt Myths, but one fact remains the same. You must Pay Tax Debt on time! It's incredibly important to pay tax debt and not ignore it. Record numbers of taxpayers think it is okay to ignore tax debt, and not pay tax debt. This is just one of the may Tax Debt Myths. This article will answer the Common Tax Questions and help debunk Tax Debt Myths.
1. Is it true that I have to Pay Tax Debt? I was told you could just ignore it!
Myth
This is one of the most common Tax Debt Myths. You must pay tax debt if you want to avoid painful IRS collection actions like a bank levy, wage garnishment, or even an asset seizure. If you refuse to Pay Tax Debt the IRS will use any of the listed collection methods to collect from you by force.
Is it okay to cheat on my Tax Returns by lying and claiming false deductions?
Myth
This is another one of the Tax Debt Myths that simply won't go away. If you file false deductions on your Tax Returns you will end in up in debt to the IRS. You will be at their mercy, and forced to repay all that you owe the IRS, plus interest! This is one of the worst and most prevalent Tax Debt Myths.
Can't I easily Pay Tax Debt Monthly?
Myth
It's not exactly easy to pay tax debt monthly, and not everyone will qualify for a month arrangement to pay tax debt. In truth, if you owe a huge amount to the IRS and can pay tax debt in full, it might be a little harder to negotiate monthly ways to pay tax debt. If you qualify, the IRS will choose the amount you pay monthly. Additionally, you will face fierce consequences if you don't repay your debt in a timely manner.
Can I really settle my Tax Debt for "Pennies on the Dollar"?
Myth
This is one the Tax Debt Myths you may have seen on television commercials. Remember, if it sounds too good to be true, it is. You can expect to pay tax debt in full, not for lowered "pennies on the dollar" amounts. This is because few people qualify to have their tax debt settled. Even those that qualify will never usually have their tax debt settled for a very low amount.
If I ignore my tax debt, will it eventually go away?
Myth
These kinds of Tax Debt Myths likely stem from the fact that the IRS has a limited Time Frame to collect on Tax Debt owed. The Statute of Limitations on your Tax Debt is 10 years. This is longer than the average debt, and during these 10 years the IRS is free to seize funds directly from your paycheck or your bank account. The interest on your debt will continue to accrue while it's not paid in full, even if you actually pay tax debt monthly.
So the answer is yes, the Tax Debt will eventually disappear when the statute runs out, but it will run you raged in the mean time. It's really not worth it to ignore Tax Debt. The IRS may even seize assets like your second cards or homes if necessary.
