From fine to jail time: what happens if you don't pay taxes

Once the IRS finds out you haven't paid your taxes, the consequences can range from mildly annoying to "life will never be the same" type of nuisance. Edition Money Talks decided to figure out what threatens tax evasion in the United States.

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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 don't pay your taxes, you'll be assessed a financial penalty that will increase the longer you fail to pay.

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 placed on a property, it will be difficult for you to sell or borrow anything against your property. A tax lien will also appear on your credit report, which can hurt your credit score. Lenders will also be publicly notified that the IRS has priority in sanctioning your property,” the IRS said.

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 earn $1000 every two weeks, the IRS can charge up to $538 to your check each pay period,” the H&R Block website explains.

5. Anyone can find out about your debt.

It is very bad to be a debtor, but it is even worse when others know about it. And a tax lien is a public record—meaning it can be found not only by creditors, but also by potential landlords and employers.

On the subject: What you need to know about tax categories in the USA in order not to pay too much

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 jail time. The IRS doesn't throw people in jail who are simply having trouble paying their bill. But if you are actively trying to deceive the government, watch out!

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