Owing money to the IRS can be especially stressful for several reasons:
- Legal consequences: The IRS has the power to take legal action against you if you fail to pay your taxes. This can include levying your bank account or wages, filing a federal tax lien against your property, or taking you to court. The fear of these legal consequences can be stressful and anxiety-provoking.
- Penalties and interest: If you owe taxes to the IRS and fail to pay on time, you will be subject to penalties and interest charges. These fees can add up quickly, making it even harder to pay off your debt and creating a sense of financial pressure and stress.
- Complexity of tax laws: The US tax code is notoriously complex and difficult to understand. This can make it hard to know what you owe and how to pay it, adding to feelings of stress and frustration.
- Social stigma: There can be a social stigma associated with owing money to the IRS, as it can be seen as a sign of financial irresponsibility or even criminal activity. This can create feelings of shame and embarrassment, adding to the stress of the situation.
Overall, owing money to the IRS can be especially stressful due to the legal consequences, complex tax laws, and social stigma associated with it. If you find yourself in this situation, it’s important to seek the advice of Matthew Jennings, JD, MBA, EA, RFC®, CEP®, CES™, aka Tax King Matt to help you understand your options and minimize the stress of the situation.