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American economists generally agree that the latest recession was the worst financial downturn since the Great Depression. Millions of jobs, homes, and fortunes were lost in a little over a year and half. The US emerged from this economic crisis in June of 2009, and most of the experts predicted a slow recovery. But they didn’t know just how slow it would be. The Bigger They Are, the Harder They Fall. America has a much tougher time recovering from the global recession than most economists initially predicted. Unemployment remains high, deficits are growing, and people are still losing their homes. Some experts have even predicted a doubt-dip recession, in light of the glacial pace of the so-called recovery. But that hasn’t stopped the IRS from collecting tax debts. With fewer people working and more deductions, tax collections declined during the Great Recession. In 2009, total federal tax revenue plunged by $138 billion, a dropout of 34 percent from the previous year. It was the single largest decline since 1981. As the only source of revenue for the federal government, the IRS could not afford to have another bad year. They were determined to recover in 2010…and they did! How did they do it? The IRS poured money into their enforcement wing, which is responsible for sending out IRS tax audits and for chasing down tax delinquents. The small but infamous division had previously posted impressive profits and the agency put their money on them. The gamble paid off. With a record budget of 5.5 million, the enforcement division collected $57 billion in tax debts in 2010! They accomplished this awesome feat by sending out nearly 1.6 million IRS audits, the most of the decade. Resolve Tax Debt ASAP An IRS audit is the financial equivalent of a heat-seeking missile. It will find you wherever you are and it will almost always detonate. The only question is how damaging the ensuing explosion will be? With the help of an experienced tax advisor, it may be possible to emerge unscathed. Where to begin? The first and most important advice we can give you is to always file a tax return. It doesn’t matter if you cannot afford your entire tax debt. As long as you file a return and include a nominal sum, even ten dollars is enough, the IRS will not classify non-filer. Non-filers are considered the dregs of tax delinquents and they receive much stiffer fines and penalties. But if you file a return and include some payment, the IRS will assign you non-collectible status. It isn’t ideal, of course, but it is far better than the alternative. Experienced tax professionals always advise their clients to pay as much as they possibly can, that way there will be fewer fines and penalties in the future. It is also important to contact the IRS as soon as possible after you receive a bill for back taxes. If you show them that you are serious about settling your tax debt, they may be more amenable and grant you a manageable payment plan for taxes. For more information about tax help, tax resolution serivces, or tax lawyers help please visit Txmstr.com.
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