The Paralysis Tax
That drawer full of unopened IRS letters is costing you more than you know
The IRS notices had been in that drawer since February and it was now November.
My new client, Marcus, who now owed $55,602, never opened them. According to his wife, Cathy, she could tell something was wrong. He wasn't sleeping well, was super stressed out after work, and he was snapping at everyone in a way which was new. But she didn't know about the drawer, and the notices inside, until November. She found it while she was looking for a pen.
Nine months of IRS notices were unopened and stacked in order of arrival, meaning Marcus had picked them up, looked at, and put back down, but never read them.
When she found the notices, she carefully said to Marcus, “Do we have tax problems?" He admitted they did but told her he was "figuring it out." Then she asked the most important question, a question he hadn't been able to ask himself: who can help us?
That's when I got their call.
I pulled their internal IRS transcripts, reviewed balances owe, penalties and interest, statute of limitation dates. I analyzed account and wage and income transcripts and assessed the situation. The problem was solvable. It was overwhelming for Marcus, who didn't know where to start, but solvable with the help of someone like myself who does this for a living.
Marcus knew he had a problem but it seemed absolutely daunting. He didn't understand it and didn’t know where to start, so he didn’t.
But it was more expensive than it would have been in February. Financially, yes, but also in other ways where the weight of the tax debt had seeped into every aspect of their life.
I call this the Paralysis Tax.
It's not advertised, but it exists. It's paid in penalties, interest and narrowed resolution options, but possibly more importantly its paid in anxiety and overwhelm that consumes your personal and professional life.
Whether they're a small business owner, a self employed consultant, or someone who gets a paycheck, when they get an IRS notice, the natural response is anxiety and overwhelm.
The letter goes in a drawer, unopened and never looked at again. It can feel like weakness, but it's not. It's a completely human response to something that feels too big, too difficult, and too complex, to take on.
But it doesn't pause the IRS.
Interest accrues and penalties go exponential. The collection notice sequence escalates one by one and every month those letters sit in that drawer, the balance grows and the leverage narrows.
Avoidance isn't a neutral proposition. It's a decision. And like most decisions made from fear, it compounds.
The financial repercussions are real, but that's not the full story.
Marcus had a (in his mind) huge tax debt which he had no idea how to resolve and he was just waiting for the day the IRS took his bank account and foreclosed on the house (they weren't going to foreclose on his house).
He felt it in every aspect of his life.
Sales suffered for Marcus during those nine months the letters sat in the drawer because he was upset, and in turn, distracted. He carried that extra weight every day at work, every dinner with his family and, in every conversation with his kids.
IRS notices are a threat but they’re also a roadmap to resolution.
IRS notices are unpleasant They use purposefully scary language because they want you to pay but at the same time, they are also giving you information about your case. They’re telling you what's happening and what you can do about it. The deadlines are opportunities, but once they've passed, they're gone.
Not only did hiding the notices in the drawer not protect him from collections, but it also destroyed the roadmap to resolution.
The Tax Resolution Plan
I pulled the transcripts, assessed the situation honestly, told Marcus it was solvable and explained to him how I would fix things.
Psychologically, things completely changed.
Not when the tax debt was resolved, but when I provided him with a plan. A named path towards resolution provides lightness in the darkness.
That's what my Tax Resolution Plan does. It’s an honest assessment with defined next steps and there’s no judgement.
The first step isn't resolution. It's finding out what you're dealing with and that it can be resolved.
Everything follows from there.
- Stephen A. Weisberg
➥ Contact Attorney Stephen A. Weisberg for a free Tax Debt Analysis.
Contact Me Here: https://www.weisberg.tax/contact-1
Email: s.weisberg@weisberg.tax
Phone/Text: (248) 971-0885
Address: 300 Galleria Officentre, Suite 402, Southfield, MI 48034
