You want to know my deep-dark shameful secret? I have significant tax debt. I have significant tax debt because I didn’t file taxes for 4 consecutive years. I owe over $30,000 to the Feds and about $6,000 to the state of California. It’s a huge sum and I often feel I’m beating tax debt with a feather.
Unlike credit card debt, tax debt doesn’t get “written off.” It’s just there. Always. Making you feel like a shitty American and a perpetually broke bitch. A few years, the pressure and the guilt became too much. I downloaded Turbo Tax and submitted 3 years of back tax filings. Why not all 4, you ask? Because I lost all the requisite paperwork.
In their wisdom, the IRS “filed” that year for me. And not-so-big surprise, they inform me I owe a shitload of money for that year; nearly $11,000 in taxes and over $3,000 in fees and penalties for that one year alone. CA State wants another $6,000. Gulp! Since that time, I pay $400 a month on a installment payment arrangement with the Feds. California Franchise Tax Board are fuckers that won’t ever answer their phone so I pay them when I can. And for my troubles, they placed a lien against me.
Still with me? Cool. Here’s the fun part of this story.
This past December I decided to invest in my first artificial Christmas tree for my first season in my first SoCal apartment. The tree is beyond cool but its box is larger than a coffin. There was only one place to store it and that place was full of old paperwork. So, with no other storage options, I was forced to sort through every damn thing. Every box. Every file folder. And low and behold…in a red folder marked “Goodwill” I found my missing tax forms! With the hope of some meager savings, I delivered the paperwork to my tax lady at HR Block and asked her to do what she could. (Yes, I learned my lesson and now pay for a professional.) With fingers crossed, I waited to hear.
And then, last week, the call finally comes. Not only did she save me money, the IRS and California owe me a refund for that year! HOW COOL IS THAT?!?!? I did have to pay her $500 for her efforts and have yet to file the forms myself at the local tax offices….and yes, I may still owe a penalty for non-payment…but I approximate a $19,000 reduction in debt!
Moral of the Story: Sometimes money does grow on trees. Even plastic ones.
I’ll be writing more about what I learned about taxes and tax debt in upcoming posts but, for now, I just felt like sharing the great news!