Which people get in tax trouble the most?
- March 12, 2020
- David Greene
- Comments Off on Which people get in tax trouble the most?
I can’t say that there is any one group that tends to get in trouble more than any other, but there is one type of taxpayer who tends to get in trouble frequently. Self employed people tend to find themselves in trouble more often than people who work for wages. Examples are attorneys, real estate agents, contractors, insurance agents, and, of course, any small business owner. The reason this happens is that the income of the self employed tends to fluctuate over the months and years, thereby making it difficult to plan for estimated and final tax payments. Also, taxes are not withheld from paychecks and these people usually do not have a large reserve from which to draw if they are caught short at tax time. That is why Estimated Taxes are required from the self-employed. Another type of person that I often find in trouble is the individual who has gone through a crisis in his life, such as a divorce or death of a loved one and he simply drops out of the system for awhile. The good news is that the IRS recognizes that the people I have discussed usually have valid reasons for being behind or not filing and are willing to work with us through Offers In Compromise or other means.