Friday, September 25, 2009

The IRS Is Not As Scary As You May Think

First an admission ...

Due to circumstances that were largely NOT beyond my control (even though I'd love to use that excuse), I just recently filed several years of back taxes. I won't go too far into the mucky details; but basically I had one tax year where I either owed a bit, or was due a refund; depending on whether or not someone was legally considered a dependent. The problem was, I was missing a key piece of information that would help make that determination.

And that's where my "stupid" started ...

Instead of just sucking it up, and paying the high 3 figure amount (really not significant in the big scheme of things) for that tax year, I decided to wait for the documentation, that I expected would allow me to get a refund instead.

Then I got even "stupider" ...

While waiting (and waiting, and waiting, and waiting) for said documentation, I subsequently ass-u-me(d) that it wouldn't be a good idea to file current year returns, since I still had an earlier one I didn't file ... so I "missed" a couple more years.

And here's the really, really, dumb thing. For a few of those years that I skipped, I was due some pretty substantial refunds. (although, I didn't realize it at the time).

I'm not sure why I was so dumb, why I let myself get paralyzed into inaction on a such an important matter.

Part of it is probably just basic human nature ... once you screw up, and you know you've screwed up, it's much easier to simply try to avoid the situation, than to deal with the consequences.

... and speaking of consequences, we're talking about the I. R. frickin S. here. I think I was always probably "just a little" scared of what was going to happen when it all caught up with me.

Anyhow, earlier this summer, I bit the bullet, and took care of the problem by filing "several years" of back tax returns all at one time.

As expected, I owed money for the original year ... + penalties and interest (although not nearly as bad as I thought it might be). For every other year, I was due a refund.

Note: Before I started this process, I called one of those tax trouble businesses who does a lot of advertising on radio and tv. (I won't name them, but you can probably figure out who I'm talking about). They offered to guide me though the whole process ... right after I gave them a credit card #, so that they could charge me about $3,000 !!!

The sad part is, I was so scared of the IRS, that I almost paid it.

Not paying the "no vowels, just savings" people , was about the only Smart decision I made when it comes to this whole ordeal. (although, had I actually owed 10s of thousands of dollars, I do suspect that their services may have been very much worthwhile to me)

Here's the really IRONIC thing though ...

Today was the day that everything is finally wrapped up (my returns are all current, my debts are paid, and a refund is coming my way). I actually just got off the phone with the IRS a little while ago, before deciding to write this post. And I have to tell you ...

Throughout the entire process; from finding the right forms, to getting phone numbers and addresses, and even answering quite a few questions that I had; the people I dealt with on the phone at the IRS were nothing but Friendly, Understanding, and quite honestly (from my perspective) Very Helpful.

In hindsight, what the heck was I so scared of ???

So, that brings me to Todd's Tip for today ...

If you find yourself having tax difficulties, (unless you really have done something questionable or wrong); before you either go into debt paying someone to "help" you, and/or let fear paralyze you into inaction (which could end up being even more costly); pick up the silly phone and call the IRS.

... you might just find yourself pleasantly surprised by the outcome. (and I assure you, even if not "pleasant", the result will most likely be much better than if you wait for them to call you first).

Todd

p.s. I'm not terribly sure about the wisdom of sharing this story so publicly. But ultimately, I figured that the potential benefits someone (in a similar situation) may gain from reading about my "stupidness", probably outweigh any possible additional consequences I may be subjecting myself to by sharing (especially since the situation is already resolved).



thumbnail credit:on flickr

5 comments:

  1. Maybe that's another definition of 'tax burden'... the worry we tend to have about it. Glad it's all getting squared away and the burden lifted.

    May all your contrail clouds be chemical free :-) !

    ReplyDelete
  2. hi Todd,
    No, the IRS is not as scary as you may think... they are even SCARIER! :)
    OK, probably a sorry attempt at humor...
    Anyway, I'm glad you got that worked out.
    I've found them to be professional and helpful the very few times I have contacted them, but one time they were of no help whatsoever. But I can't really blame them... it is because the US tax code has become so complicated and screwed up due to the politicians that my question had two or three possible answers depending on which part of the conflicting code you decided to read... Anyway, I'll just blame our politicians for that.
    Again, glad you got this taken care of. That was the smart thing to do!
    ~ Steve, the often-confused trade show guru
    .-= steve, trade show guru´s last blog ..I Hate Upgrading… but I did it. =-.

    ReplyDelete
  3. Hi Steve,

    Oh yea, I definitely hear you on the politicians. Earlier this year, I thought some sensible politician (lol, now there's an oxymoron) had a perfect opportunity to strongly advocate for simplifying the tax code.

    When it was discovered that Timothy Geithner had made "mistakes" on his tax returns I could almost visualize the tv ad ...

    "If our tax code is so complicated that the Treasury Secretary can't figure it out, what chance to the rest of us have?

    Contact your representative and tell them you want the tax code simplified Now!"


    But alas, the Republicans, and the media instead when the predictable "he must be corrupt" route.

    Oh well, maybe some day.

    Todd

    ReplyDelete
  4. I am glad that you got everything dealt with in the least jail time kind of way. Normally most IRS stories end is horrible ways with people's lives turned upside down.
    .-= The Real Josh´s last blog ..Why You Should Video Blog =-.

    ReplyDelete
  5. Really the irs is not bad. If you have a problem and need to work out payments they will even let you pick how much you pay. As long as you make these payments they leave you alone.
    .-= Rocky´s last blog ..Kenny Chesney: Possibly the Hottest Male Crossover Artist in Country Music Today =-.

    ReplyDelete