The ring, the house, and the IRS

The worst time to fix a tax problem

Every week my phone rings with the same story, wearing a different outfit.

Somebody found the house. Or they need a car. Or they're about to get engaged, getting married, and they want to clean up the mess before they start their life together. Or they booked a trip and just found out their passport's a problem.

Different reasons. Same request:

"Carlos, I need this tax thing fixed. And I need it fixed by this date." 

Sometimes it's not even a new caller. It's somebody already working with me. Case is moving along just fine.

Then the realtor calls, a closing date shows up, and suddenly I'm the guy holding up the parade.

Now let me be clear about something. These are good reasons. A house. A wedding. A new life with somebody you love. I'm rooting for you.

I want you to have all of it.

But I'm going to tell you what most people in my business won't, because they'd rather take your money than lose your deal:

You've got it backwards. 

The house isn't the priority. The wedding isn't the priority. The tax problem is.

Here's why. If you owe a big balance or you have years that were never filed, the IRS doesn't care about your escrow date.

It does not care about your venue deposit. And your lender?

They'll probably pull your IRS transcripts anyway. The unfiled years show up. The balance shows up. A lien shows up.

You're not sneaking past it.

And when people try to rush it, here's what I watch happen:

• The "make it go away by Friday" payment plan. They sign up for a monthly payment they can't really afford, just to get a letter for the lender. A few months later they default, and now they're worse off than when they started.

• The step everybody wants to skip. The IRS generally wants your missing returns filed before it'll agree to almost any kind of deal. That comes first. Period.

• The surprise at the closing table. A lien they never knew existed pops up just as they think they're about to sign.

• The joint-return trap. When you file a joint return, you're both on the hook for the tax on it. Your future spouse deserves to know what they're signing before that first return goes in.

• The passport problem. A seriously delinquent tax debt can get reported to the State Department, which can deny or revoke a passport. Ask anybody who found out at the worst possible moment.

Before I ever did this work, I was an Army medic and later an EMT.

And the first thing they drill into you is triage.

You don't fuss over the broken finger when the guy isn't breathing.

You handle what's going to kill him first. Everything else waits its turn.

Your tax problem works the same way. File the returns. Find out what you really owe. Pick the right resolution for your situation, not the fastest one. Then go buy the house. Then plan the wedding.

And here's what waiting costs you. Every month, penalties and interest keep stacking up. Rush it, and you might lose the deal anyway, or lock yourself into a payment that strangles your budget for years.

Do it in the right order, and you walk into that closing, or down that aisle, clean.

The house will still be there. So will the wedding.

The IRS will be too. That's kind of my point.

If you've got something big coming up and an IRS or FTB problem standing in the way, call my office at 909-570-1103 or CallTaxEa.com.

We'll figure out what you're really dealing with before you sign anything.

Carlos Samaniego, EA
The Tax Debt Detective
TaxDebtConsultant.com 

P.S. If you're already a client and you've got a closing date or a wedding date coming up, tell me now. Not the week before. I can't make the IRS move on your schedule. Nobody can. But the sooner I know, the better I can plan around it.