This was going to be a Valentine's post, but I got caught up with other work.
Your so-called loved ones... During my life as an IRS-Hitman and during my time helping those with tax debt, I've made an observation. And that observation is this: you can't trust family, friends, or spouses when it comes to money. All too often, someone is in debt because they loaned family members money and were never paid back. Or they co-signed on a loan and got stuck with the debt. So, how can your family and loved ones stick you with an IRS debt?
You can depend on dependents... to get you into debt! Too often, I've seen people try to get a child tax credit for their girlfriend's, sister's, brother's, or cousin's kids, only to have it come back and bite them. The problem with child tax credit, especially if you're not the birth parent or legal guardian, is that you have to prove the child was in your care for the tax year in question.
If your wonderful family member who stuck you with their kid decides they're going to claim their child, or if they refuse to provide you with information like a birth certificate to prove that you're related, you will get stuck with the tax debt.
For better or worse, kind of... Friends and spouses can't be trusted any more than your own children. I once worked a case when I was an IRS-Hitman where a man who owned a business with his best friend owed a substantial tax debt. And how did he get into debt? His best friend and partner embezzled money from their company and took off with the debtor's wife. He got stuck with the debt and had to pay the wife in the divorce because he couldn't afford a decent lawyer.
Brotherly love... Another story involves two brothers. One of the brothers was in tax debt, and the other wasn't. The one who was in debt gave his brother his boat so the IRS couldn't seize it. Not only can the IRS seize the boat, but because the brother in debt signed the boat over, his brother who didn't have a debt didn't include the boat as gift income, got audited, and now owes the IRS as well.
This shouldn't convince you to turn away from family and friends who need help. It should only serve as a warning that when it comes to money and debt, even those closest to you can prove untrustworthy.
Now you have the smoking gun... Use it!
Labels: Back Taxes, Children and Tax Debt