The Profound Effects of IRS Issues

Many of us do take tax issues lightly. We tend to believe that like all the other debts, we can just choose to ignore them, hoping they will go away in time. We never exert any effor to at least reach out to the agency and tell them we would like to come up with a compromise.

The effects of nonpayment of taxes and other IRS issues, however, are horrendous as they can affect all aspects of your life:

1. You may not be able to refinance or sell a home. The IRS can impose a tax lien on your property such as your house. This means that it carries a liability, thereby greatly reducing the property’s market value. Worse, you may not be able to sell it at all unless you have already settled the balance. You are not able to maximize your property value, and you do not get any money to help finance your debt.

2. Your wage may be garnished. When we say wage garnishment, it means a portion of your income is already mandatorily allotted to the repayment of your IRS debt. This is ordered by the court and should therefore be honored and executed by your company. What does this mean then for you?

First, your income will definitely be lesser. In the process, some of your obligations may no longer be met soon or not at all. You may also not be able to save any more money or pay off existing debts. These debts accumulate until you default.  

3. It affects your credit score. When you can no longer meet your financial obligations and incur more debts, your credit score will suffer. If your score falls, the chances of getting good rates for loans, among others, become slim.

4. It damages your reputation. The logic here is simple: if you can’t honor your commitment to the government, then you cannot do so to your other responsibilities. Moreover, there’s also the suspended belief that people with tax issues are embroiled in such because they try to pay less. In other words, you lie your way to the IRS.

5. Tax issues can give you a lot of stress. Stress is our body’s fight-or-flight response. When you start feeling nervous, sweaty, and anxious, it means your body is telling you to do something about the stressor. IRS issues can last for some time, and unless it’s settled, you may find yourself under too much stress that it already becomes harmful to the body. Your blood sugar and pressure go up, your metabolism slows down, and your body becomes more inflamed, making you more prone to serious diseases. Stress can only worsen your mental and emotional state, so IRS problems can cause chronic depression, among others.

6. It can take a toll on relationships. Wage garnishment can mean you cannot meet all the needs of your family. When you have money issues, you’re forced to take on more jobs and spend less time with family and friends. Money issues are also one of the biggest reasons for divorce in the country.

Life is too short to spend even a few years trying to avoid and deal with IRS issues. Settle them as soon as possible with the help and guidance of an experienced tax attorney.