There are two very common fact patterns we come across:
- A business owner that has run up a large tax problem.
- Someone with foreign accounts and assets who hasn't been reporting them correctly. They too, have a large tax problem.
In both cases we often find that they have not been forthcoming about the true nature of the issue with their significant others. In this article I am going to discuss three steps to take to break the news of an IRS problem to a spouse.
First, understand you are not alone and you are suffering a real trauma
Would not the fact that I am writing this article as a common issue amongst our clients be evidence that you are far from alone? The IRS is all-powerful, and even with good advice it is still difficult to determine the best step when dealing with a tax issue. High-stakes errors run rampant.
You are probably overworked and are feeling fear and anxiety. You feel like the problem just keeps getting worse. You've hoped something would have happened so you could easily solve the problem without your spouse ever knowing about it. But that hasn't happened. You soldier on, dealing with the incredible stress of wondering how this will affect your family.
You feel like it is ruining you and wonder how this will end. We've spoken to plenty of people who are in a dark place — a place where they may even ask the question "Will my family be better off with out me?".
The answer is a resounding no. This issue can be fixed.
Second, accept the truth
To fix a problem you must be honest about it. With tax problems, it hard to actually know what is going on. So, your brain will fill in the gaps with alternating visions of complete disaster, or an hope that somehow, everything will turn out okay.
Everything can be okay…if you actually know for sure what is going on. And if you can come up with a plan.
One of the joys we have as tax professionals is when we complete our preliminary investigation into a clients IRS history. Sometimes we find great news; maybe the tax debt is going to expire shortly or an offshore disclosure isn't required. Most of the time, it's a mixed bag. There's some good news, and some serious issues.
No matter what the news, we also find joy in knowing that our clients are no longer in a fog. They no longer have fear and doubt. The path to a cure becomes more obvious. Knowing there is a cure is a cure of itself. Solving a tax problem is about taking care of yourself first, so that you can take care of others.
Third, trust your spouse
Your wedding vows probably said something like "for better or worse." A tax problem? Yes…this is the "worse." It can get better; yet rarely can it get better without the love or support of your spouse.
You have nothing to lose by trusting your spouse and telling them about your tax problem and your plan to fix it. You either learn:
- It is time to move on, no matter how painful, from a marriage that could not be saved;
- or you learn that your spouse is a lot more awesome than you imagined.
Maybe luck will find you. Maybe you will be able to find some source of money to get out from under and no one will be the wiser. Maybe the IRS will go away. Or maybe you need help.
Whether an international issue, a tax debt issue, or even criminal worries, we have helped some talented people take care of their problems, permanently.