We don't usually think of the IRS as a creditor, but it is. It is collecting money for services you didn't order, and can't name, but you get billed anyway. And this is one creditor you definitely don't want to blow off!
Because income tax rates rise with income, economic growth causes federal taxes to rise faster than income. According to the Congressional Budget Office, between 1995 and 1998 individual income taxes rose by $141 billion more than they would if taxes had only grown as fast as the economy. Nothing else you buy increases in price this fast, not your groceries, not your phone bill, not your clothes.
If you are in financial trouble, the IRS and the
effect of the tax rate
is probably a big part of your debt
problem. The good news is that you can treat the IRS like any other creditor --
they will negotiate with you!