When we think about debt, we usually think about our credit cards and our expenses, their interest rates and our credit scores (or any other eligibility measure that financial institutions apply in your country); but we rarely think about our obligations with the government. Yes, I mean our taxes.
In an ideal world, we would usually have the money to file our tax returns together with the payment of our contributions; but sometimes we are short of money, so we do not pay our taxes in full… or at all. After all, bills, banks and, of course, our own expenses usually receive priority. The government can wait, can’t it?
We can get away with not paying for a while, but time goes by and, a few months later, the government will notice we failed to pay them. This is where problems start. The government may not be a bank, or may have not had us sign a contract with it, yet it still charges interests and arrears. It may send you a letter or two about your tax debt to remind you that you owe them money. You may opt to ignore them, and get away with it some more time; but eventually it will turn on its collection engines… and, believe me, you do not want to be there.
Depending on the laws of your country, the government may opt to freeze and levy your bank accounts, start a tax lien procedure on your property, and even garnish your payments by filing an order to your employer. All of them are terrible scenarios. Frozen and levied bank accounts may prevent you from paying your other obligations, such as your mortgage. A tax lien on your property may leave you without a car in a matter of weeks. A garnishment order on your salary will make your boss think very bad of you, and even jeopardize your job (because… who wants an employee that may be desperate for money walking around their offices, after all?).
As you can see, tax debt can become a terrible silent enemy, so it is important to take that bull by the horns before it is too late.
Fortunately, every government has more than a way to help you face the consequences of tax debt. The simplest one is certainly going to speak with them, but it is not always the most convenient. A good tax specialist, on the other hand, can evaluate your economic situation (using specialized tools such as PitBullTax), consult the law and give you a better solution for your pocket.
Would you like an example? Be my guest:
Imagine for a moment that you failed to pay your taxes for four full years. If you followed your basic instinct, you would go to the tax administration office and just settle the whole debt in instalments, agreeing to pay a portion of the whole debt with interests for a set period of months.
Yet… what if there was a tax reduction two years ago? Would you still want to pay the whole debt?, or would you rather use the tax reduction to pay them less? The latter, right? That’s why speaking with a tax specialist is important in a tax debt situation.
A tax specialist can help you even if you are suffering the consequences of tax collection procedures. If you are in tax debt, contact one and ask them to help you get the best solution to your problem.