A tax-related blog can hopefully be forgiven this time of year for recurrent reference to a theme that is playing out in a broad-based way and with strong relevance for a large number of American taxpayers.
There once was a time when wealthy Americans with money stockpiled abroad in Swiss banks could sleep easily at night, knowing that their account details would be kept shielded from the prying eyes of United States Internal Revenue Service agents.
Here's the bottom-line take from the Internal Revenue Service regarding money held abroad in foreign banks by Americans: You can have your cake, but we want our slice.
Well, here’s a bit of an irony and slippery slope that is presented immediately for any taxpayer in Minnesota or elsewhere who is seeking to take purposeful action regarding a tax matter.
Many individuals who owe a substantial amount in back taxes are also facing significant financial difficulties, as financial troubles are one of the more common reasons for a person to initially fall into a tax debt. Facing both a large federal tax debt and financial struggles at the same time can be remarkably stressful on a person and can leave them very worried about the future. Such individuals may feel like their financial struggles will make it impossible to address the debt and impossible to avoid the wrath of the Internal Revenue Service.
If it doesn’t automatically qualify as a Minnesota business owner’s worst nightmare, it’s got to be a ranking contender.
It certainly doesn’t qualify as anyone’s favorite mailing.
The tax code in the United States is extremely complex. People generally have only the basic understanding that they need to pay taxes, and going through the steps to file a return can be quite stressful, particularly if someone has multiple sources of income and/or a business.
In the last several weeks, we have discussed the upcoming April 15 deadline to file federal tax returns. Although many people may have already completed this process, others might simply be waiting to have all of the information necessary to complete a filing. Since the deadline is looming, many of those who are in this situation might be worried about not having enough time.