It's here. Are you prepared? Photographer: Daniel Acker/Bloomberg
It's here. Are you prepared? Photographer: Daniel Acker/Bloomberg

So let’s say you sat down to do your taxes this weekend. And let’s just say, hypothetically, that you realized you owe the Internal Revenue Service way more money than you have in your bank account. Perhaps you spent yesterday evening hyperventilating into a paper bag.

Luckily for you, Joe Kristan, a tax expert, has put together a post walking you through your options. I’m not going to excerpt it, because if you’re in its target audience, you should go over there and read the whole (short) post, including the comments. For those who are happily anticipating a refund, the gist is that you can’t make the problem go away by ignoring it, and you really shouldn’t try. Seriously. There are loan sharks who are more forgiving than the federal government.

You never, ever get away with not paying the government money that it thinks it's owed, unless you can prove conclusively that you don’t owe it. You’re probably aware that student loans cannot be discharged in bankruptcy unless you’re permanently and totally disabled. Perhaps you had not realized, however, that they’ll take the money out of your Social Security payments if they can’t get it any other way. And as for what they do about Social Security overpayments ... well, the sins of the father are literally visited upon the children:

Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about -- often a debt incurred by their parents -- the government has confiscated their check.

The Treasury Department has intercepted $1.9 billion in tax refunds already this year -- $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago -- the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.

No one seems eager to take credit for reopening all these long-closed cases. A Social Security spokeswoman says the agency didn’t seek the change; ask Treasury. Treasury says it wasn’t us; try Congress. Congressional staffers say the request probably came from the bureaucracy.

The only explanation the government provides for suddenly going after decades-old debts comes from Social Security spokeswoman Dorothy Clark: “We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due.”

Since the drive to collect on very old debts began in 2011, the Treasury Department has collected $424 million in debts that were more than 10 years old. Those debts were owed to many federal agencies, but the one that has many Americans howling this tax season is the Social Security Administration, which has found 400,000 taxpayers who collectively owe $714 million on debts more than 10 years old. The agency expects to have begun proceedings against all of those people by this summer.

Now, morally speaking, I’m not comparing legitimately owed tax debts with dunning the children for some sort of trivial overpayment that occurred so long ago that the hazy mists of time have obscured the actual complaint. I’m just saying, don’t mess with the government. It’s not worth it.

On the other hand, while you have to pay, you should be careful how you pay. There are basically three types of tax trouble. There is “I was underwithheld at work because my salary changed over the course of the year but didn’t realize it” or “I’m a freelancer or small-business owner, and I forgot to put away enough money for taxes, or I incorrectly estimated what my tax bill would be.” Then there is “I am a small-business owner or otherwise self-employed, and I am on the brink of financial collapse; the money with which I hoped to pay the taxes had to go to keep my creditors (barely) at bay.” And, of course, though I hope this is not you, there is “I have been cheating on my taxes.”

The first two kinds of problems are the kind that you can basically deal with on your own, if you have to. Figure out where you can borrow the money to make the IRS whole, and if you can’t, then talk to the IRS about a payment plan. Don't cash out your retirement accounts -- that will leave you with a bigger tax penalty next year. But otherwise, you can probably get through this on your own -- just remember that the IRS, while not particularly forgiving, would certainly rather work with you than sue you. As long as you communicate with them rather than sticking your head in the sand, you should be able to work this out.

But if you’re experiencing the latter two sorts of trouble, then you can’t fly solo here; you need professional assistance. Consult a bankruptcy attorney or a tax lawyer. Those cases are going to be complicated, and what (and how) you pay needs to be carefully considered by someone who’s thoroughly versed in the relevant law. You should definitely file a return tomorrow regardless. But you should also seek expert representation as quickly as possible.

Tax debt is never good. But the quicker you act, the more likely you are to keep the bad from turning into the catastrophic.

To contact the writer of this article: Megan McArdle at mmcardle3@bloomberg.net.

To contact the editor responsible for this article: Brooke Sample at bsample1@bloomberg.net.