Talk to the tax man

Last year we got over our heads a little bit on our taxes because of new business relationships. Caught up in the excitement of starting up and producing things, we neglected some basic recordkeeping and filing, and as a result the tax filing did not go smoothly at all. We filed extensions, missed deadlines, and stressed out a lot.

The good things I remember about the debacle were that my business partner was very forgiving and supportive, and that the folks at the IRS call center were extremely helpful as we looked for a few answers.

The IRS really bends over backwards for people who try to fix their mistakes. I’m not kidding! One IRS call center employee suggested that I send a letter asking for leniency on a $200 penalty that I owed for not filing a couple of reporting forms on time. I did so. I haven’t received a bill yet. So far, that toll-free call has saved me $200!

Jeff Schnepper’s article on Money Central, What if you can’t pay the IRS?, confirmed this for me today. Not filing your return is very bad and can land you in the clink, but there are several options available to you if you work with the IRS instead of ignoring them, such as payment plans and offers in compromise.

I’m in good shape to get my taxes in on time this year, but it’s good to have some experience with the kinder, gentler side of the IRS.

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One Response to “Talk to the tax man”
By anomymous on Mar 16, 2006 | Reply

Have to second this post. We had a couple of years of major tax mix-ups due to my stock trading. The IRS were extremely helpful and forgiving of my mistakes and very courteous during any phone calls. In a couple of cases they pointed out ways of paying less. I was very impressed.