If the first debt on your Debt Snowball isn’t the smallest debt, there’s a good chance it is marked as IRS debt. The reason for that is Dave always recommends paying the IRS first when it comes to the debt snowball, even if it isn't the smallest debt, for a couple of reasons.
- Their interest rates and penalties are incredibly high
- They have virtually unlimited power to collect
Put them at the top of your debt snowball and pay them first. It’s one of the few times we say to pay the debt snowball out of order, which is normally smallest to largest.