PAY ME NOW, OR PAY ME LATER

Believe it when I tell you, everyone pays taxes. Some pay sooner, some pay later, but ultimately we all feed the machine.

Richard Hatch of Survivor fame is back in jail for the third time for tax evasion. In 2006, Mr. Hatch was sentenced to three years in prison and three years of suspended release. The IRS believes that the taxpayer owes $1.7 million in back taxes from earnings in 2000 and 2001. Penalties and interest have increased the amount to close to $2 million.

Whether the Internal Revenue Service will ever collect this amount is anyone’s guess. This time of year most of us in the CPA world are just plain tired of taxes. Everyone wants services but no one wants to pay the government. I, too, am in this group. The one thing that I have learned after 28 years is that dealing with the IRS on collection issues can be very difficult. The other thing that I have learned is that usually, somewhere down the line, Uncle Sam catches up with the taxpayer.

My advice to those that think they won’t be found, don’t be surprised if you get a letter from the IRS. It is considerably easier to pay each year and move on than it is to pay five years with penalties and interest. Take all the legal deductions. Be aggressive where possible. Pay now and don’t worry later.

Steve Cook is the CEO of Cook, Gola and Company PLLC, certified public accounts with offices in San Antonio and Austin. www.cookgola.com