Owing money to the IRS can be a very stressful situation. Not only do you have to worry about how you will pay back the debt, but you also may be concerned about how tax debt can affect your professional license. If you are a doctor, lawyer, or other professional who is licensed by the state, you should know that tax problems can lead to disciplinary actions like suspension or revocation of your license. If you are having problems with the IRS, be sure to be proactive to prevent problems with your professional license.

When Is Tax Debt A Problem

It is not unusual for people in all careers to occasionally owe money to the Internal Revenue Service. Whether it is failing to deduct enough during the year, coming into an unexpected windfall, or a life change that affects your taxes, it is not generally a problem for licensed professionals to owe tax debt.

However, this is only the case if you are making an effort to take care of the debt. In most situations, your state licensing agency will expect that if you owe a tax debt, you will either pay what you owe, enter into a payment plan or settlement agreement, or otherwise make plans to address the outstanding debt.

When this doesn't happen, and the debt remains outstanding for years or snowballs into bigger problems, your state licensing agency may look into disciplinary actions.

Tax Problems Can Lead To Discipline

States require certain professions to be licensed in order to protect the public. If a position requires a level of public trust, then the state licensing board can require its members to uphold a certain standard of ethics and discipline those who fail to meet them.

Tax debt can become a problem, especially if your profession requires you to work with money or if you are in the legal field. Accountants, lawyers, security brokers, and the like may run afoul of their licensing boards if they get into serious tax problems—especially when those problems were caused by acts of fraud, misrepresentation, or gross financial mismanagement.

For instance, a state Board of Accountancy might suspend or revoke the license of a CPA that owes hundreds of thousands of dollars in back taxes. That kind of debt would suggest the CPA committed fraud or lacks the financial management skills to succeed in the profession. In the same way, an attorney who gets into trouble with the IRS for failing to file proper payroll taxes for their employees and hiding assets could be disciplined by their state bar.

Protect Your Professional License

If you are a licensed professional, it is imperative that you address problems with your taxes and issues with the IRS as soon as possible. If tax debt or other problems with the IRS are threatening your professional license, Attorney Joseph D. Lento and the nationwide Professional License Defense Team at the Lento Law Firm are here for you. We will work with your state licensing board to resolve your issues and help you continue practicing the career you love. Call 888.535.3686 or contact us online now.