From fine to jail time: what happens if you don't pay taxes
Once the IRS finds out that you haven't paid your taxes, the consequences can range from mildly annoying to life-never-the-same-day troubles. Edition Money Talks decided to figure out what threatens tax evasion in the United States.
Even if you do not file tax documents, your supervisor, mortgage company and bank will submit to the IRS forms containing your name and social security number. Therefore, tax evasion in any case will not go unnoticed.
1. You may be fined
If you do not pay taxes, you will be charged a financial penalty - the amount will increase as the period of non-payment lasts.
The exact amount of debt depends on the nature of your violation. More information can be found on the website. IRS.
2. You may lose your tax refund
If you plan to get a tax refund but don’t file a tax return, your refund may disappear. In order to receive a refund, the IRS usually requires that you send a return request within three years from the date the tax return was due or was filed.
On the subject: 4 legal tax loopholes to save thousands of dollars in 2020
3. The government may tax your property
The IRS can start doing things that really make your life harder. For example, tax your property.
“If a lien is applied to real estate, it will be difficult for you to sell or borrow anything against your property. Tax withholding will also appear on your credit report, which can damage your credit score. Lenders will also be publicly notified that the IRS has priority to sanction your property, ”the IRS said in a statement.
4. Government may reduce your income
The IRS has the right to sanction not only your current assets. Agency may levy payroll tax.
“The IRS determines the amount of your taxation using your filing status, payment period, and number of dependents.
For example, if you are single, with no dependents, and you make $ 1000 every two weeks, the IRS can charge up to $ 538 on your check for each payment period, ”explains the H&R Block website.
5. Anyone can find out about your debt.
It’s very bad to be in debt, but it’s even worse when others know about it. And the tax lien is a public record - which means that it can be found not only by lenders, but also by potential landlords and employers.
6. IRS will call you on the carpet
At some point after sending you notifications, the IRS may issue a subpoena to receive information from you personally or to force you to give evidence that will assist in your tax investigation.
If you get a summons, find a great tax attorney who will accompany you at the meeting and conduct most of the negotiations.
7. You may have to file for bankruptcy
You did not pay or could not pay taxes, so now you also owe fines and penalties. The government has taken your assets. Then the authorities began to take part of your salary. Now you don’t have enough money to pay your bills. Where is the end to all this? In a bankruptcy court.
However, this may not be the end, since filing for bankruptcy protection does not remove previous tax liens. You must fulfill many conditions in order to eliminate tax debt.
8. You may be sent to prison
The worst thing that can happen if you don't pay your taxes is imprisonment. The IRS does not jail people who are simply having trouble paying their bill. But if you are actively trying to cheat the government - beware!
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