In the Spring of 1979, Congress was “playing politics” over the debt limit, but ultimately raised it to $830 billion (a far cry from today’s $14.3 trillion) with only hours to spare.
Unfortunately, because of the last-minute approval, there were delays getting the paperwork processed, resulting in thousands of late payments of about $120 million…technically defaulting on Treasury Bills.
There is debate over if this was a default or not, but regardless of terminology used, the delay in payment resulted in a raise in interest rates that translated into billions of dollars in interest payment on the nation’s debt (paid by taxpayers).
Even the US is not immune to interest charges as a result of unpaid debt. This minor blip in history resulted in a significant amount of additional debt.
If you have a tax debt, don’t make the same mistake Congress did and increase your burden with additional penalties and interest. The results could cost you!
Sign up for our newsletter and be the first to find out when exciting IRS news happens. Yes, exciting. We're really into taxes.