Mapping your emotions when dealing with a tax debt

The realization that you have a tax debt can often be a surprise. Also, it can represent a trauma that the stages of grief can help to explain. For reference, Here’s the Kubler-Ross Model for the emotions people experience when they grieve.

  • Denial  
  • Anger 
  • Bargaining  
  • Depression  
  • Acceptance

My experience in talking with thousands of people with tax problems is that unless they can move to the Acceptance stage – they’ll have a hard time fixing their tax debt and will remain stuck in Tax Debt America. It’s possible to move through the stages quickly and even sometimes within a 15 minute phone conversation.  Below are actual quotes from tax debtors which I mapped onto the 5 stages model.


I can’t owe. 

I pay/paid enough tax. 

This can’t be happening!?! 

I hired a tax preparer. 

I did everything right. 

I have receipts and manage my paperwork well. 

It’s not my fault. 

I don’t/didn’t understand. 

I don’t/didn’t make much money anyway. 


I hate the IRS. 

I hate my preparer/wife/business partner, i.e. I feel betrayed by them.

This is another reason why my life is not good.

Why is the IRS picking on me? 


What if I just give them X? Will that fix it? 

What If I quit my job or start working for cash?

Companies are telling me I can settle for as little as 10%, is that true?


This can’t be fixed. I can’t do it myself. Other companies I’ve hired just ripped me off.

They’ll just keep my refunds, 

Keep garnishing, I can’t/won’t file anymore. 

It doesn’t matter. If i ignore it, it will go away.


This is a problem but it can be fixed. 

I’m in control of my life even with the tax debt. I can either pay it back or I can get relief.

If you are stuck in the Denial stage, chances are you will have a hard time fixing your tax problem. Looking at what people say in that stage suggests they are not willing to take responsibility for fixing the debt.  When you have a tax debt, it belongs to you only and sometimes your life or business partner, if you file jointly or if you operate your business together. There is no one coming to save you – even an experienced tax professional cannot drag you kicking and screaming across the finish line. You must be a willing participant – this is difficult to do if you don’t accept the tax debt. 

People who are angry about their tax debt often find it difficult to fix their problems too. There are myriad frustrations dealing with people, processes and paperwork. Yelling at an IRS representative won’t persuade them to provide useful information to you. Anger is not a useful emotion. Dealing with the IRS to fix a tax debt, often involves straightforward demonstration that one can or cannot pay. Screaming, cursing, sarcasm don’t contribute to the positive reception of your proposal. 

The tax resolution industry has done the most damage to people in the Bargaining stage. These tax debtors no longer deny their tax debt, their anger has faded but they are looking for a quick fix to an issue that has often taken years to develop. Unfortunately, many companies encouraging “pennies on the dollar” settlements too often have found themselves scrutinized and later sued by Attorneys General from many different states. Companies still lure bargaining tax debtors with empty promises stating “as soon as you hire us, you are totally protected from IRS collections actions” when there is no button to be pressed by an outside company that stops IRS processes instantaneously. Still, the insincere pledge to “reduce penalties and interest” is made by dishonest players knowing full well, interest is never negotiable and reducing penalties is difficult, cumbersome, and prone to failure.

The depression stage is dangerous for tax debtors because it can last a long time and can give the illusion that progress is being made. Ignoring a tax problem usually make it much worse. The IRS can estimate much larger tax debts than are really owed. Interest and penalties will then build on that larger amount. Tax refunds can be intercepted in the meantime leading to false conclusion that the tax debtor is paying off the debt. The IRS can remain quiet for a period of time where you might be misled into believing they have forgotten about you – until they wake up and make your life miserable. Under that stress, people sometimes fall back into the bargaining stage – where they might fall prey to the hollow commitments less scrupulous companies make. 

With acceptance comes freedom. Tax debtors who accept their situation and have a reality-based approach to fixing it will end up fixing their tax debt. It may take years and require substantial life changes like controlling your cashflow and budgeting or changing careers. As long as that information is out in the open, then resolution and relief is possible. 

I’ve talked to thousands of people at various stages of grief with respect to their tax debt. My hope is to move from one of the early stages: Denial, Anger, Bargaining or Depression to Acceptance. It can happen in a single phone call – if there’s hope for relief and trust in the process, we can often begin the journey and help them to accept their situation, and then look forward to the journey and the work that is needed to fix the tax debt. 

If you’d like to learn more about fixing your tax debt – you can visit the Tax Debt America Project for more information or email me directly at

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