When you read the title of this blog, I bet you thought, “Morgan, what in the world are you alluding to???” Hang with me, and you’ll understand…

Often, when a new client comes to us, there is a common undercurrent to their story with the thousands of clients I have helped over the past two decades: they experienced a challenge in their personal or professional life that caused them to be rendered unable to file their tax returns, pay their tax obligations, or both. Often, the thought process is, “Next month/quarter/year will be better, and I’ll get caught up then.” I’m here to say that, more often than not, it doesn’t happen. The tax account issue continues to get bigger and bigger, with more unfiled or unpaid 1040s or 941s, more penalties, and more interest. As the tax years or periods continue, it becomes easier for the taxpayer to “bury their head in the sand” and ignore the problem. And with this realization, the monicker “Ostrich Syndrome” was born.

Taxpayers come by Ostrich Syndrome innocently. Part of this is because upon filing a tax return with a balance due or a missed tax deposit, the IRS or state tax agency doesn’t immediately say anything! No calls are made to the taxpayer inquiring about the missed tax obligation or the balance due, and no demands are made for the taxpayer to appear in a cold government office to plead their case.

The first round of notices sent by the tax agency can take months (and sometimes years!) to be issued because the government databases are inefficient and ineffective. And, when they are finally sent, they tend to fall on the gentle side of the tax collection world with an overarching message such as this: “Taxpayer, I’m not sure if you realized this or not, but when you filed your Form 1040 for 2022, there was a balance due. We would appreciate it if you paid it right away.” That doesn’t sound too bad, right?

We all can assume that the taxpayer dreads what will happen after they submit the return with the balance owed; even though he/she may be consumed with concern, they can often distract themselves with work, family, hobbies, etc..… but the fear is constantly sitting in the back of their mind. So, when they open that first notice and see the soft wording, they typically think, “Well, that wasn’t so bad… okay, maybe this really isn’t a big deal!” Though the balance immediately starts to accrue penalties and interest, it’s often minor compared to the other financial challenges the individual or business is juggling. “I’ll get caught up with the next contract I get…”

The next notice is met with less trepidation as the Band-Aid is already ripped off and it wasn’t as bad as they had feared it would be. The envelope is ripped open with a little twinge of concern, but when they see “Hey there, this balance is still owed. Could you please pay it within the next 30 days?”, it isn’t as scary.

At this point, the initial intimidation of having a tax debt owed to the IRS or state carries less weight. Another tax liability is typically being accrued, and because the IRS or state didn’t show up at the front door with a gun drawn over the first debt, the taxpayer’s rationale that the available money goes towards keeping the lights on instead of paying the taxes seems justifiable. Frequently, the taxpayer will stop opening the notices and hide them in the back of a drawer. It’s an innocent situation that quickly grows, but if the taxpayer imitates an ostrich and buries their head in the sand, it will eventually work itself out, right?

To all the taxpayer ostriches in the world and all their tax professionals who aren’t yet urging the taxpayer to immediately start focusing on the growing debt, unless you can foresee the winning lottery numbers for next week’s drawing, the time to begin addressing the debt is now. Ignoring it will not make the situation any better. I know it’s uncomfortable. I know that it often feels like there just isn’t enough to tend to your daily bills and pay the IRS or state for the past-due income, payroll, or sales taxes that are owed. I know you are counting on the next job to clear enough profit to get caught up.

I’m here to tell you that, from having over two decades of experience handling past-due tax account issues, it is ALWAYS better to face the tax debt head-on. Do not keep your head buried in the sand! Open the notices you are receiving and seek guidance from someone with experience handling past-due tax debt situations. The team at Golden Lion Tax Solutions is happy to review any past-due tax account concern and provide guidance regarding whether a tax debt resolution professional is warranted or if you can handle it on your own with a little direction.

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Trust. Protection. Wisdom.

Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.

For help with your tax debts, email contactus@goldenliontaxsolutions.com or call 833-LION-TAX (833-546-6829)

Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.