Many people never have to worry about paying taxes, but sometimes April 15th brings a terrible surprise when you learn you owe a large sum to the IRS. If you didn't pay taxes, you might feel helpless that the government is going to take your every possession and leave you on the street with nothing but the clothes on your back.
However, the IRS isn't going to just waltz into your home or business and take everything away. They'll only do that if you start…
Ignoring Letters from the IRS
One of the biggest mistakes you might make if you've received a notice from the IRS is ignoring the letter. If you're having trouble paying your taxes, you might also be having trouble with other bills. Ignoring the letters that request payment is often the easiest thing to do when you're facing serious financial devastation.
However, the Internal Revenue Service isn't like the average bill collector or debt agent who will just harass you on the phone or with letters over time to try and make you pay. If the bill you owe is large enough, you may have to deal with an eventual lawsuit, but the consequences of ignoring the IRS are just a little bit more severe.
According to the blog from "Ready for Zero," the timeline for events with the IRS is predictable when you decide to ignore their letters:
- The IRS sends you a computer-generated letter about your taxes
- A representative from the IRS may then leave a note at your home or work
- The IRS may levy your bank account, paycheck, or savings.
- The IRS may seize personal or business assets
Best Practices with the IRS
Hopefully, you've decided to cooperate with the IRS and settle your tax burden. Whenever you have to communicate with someone from the government, it's best to employ some simple tips for making sure you have the best outcome.
One of the most important things to remember is that you need to keep all your records. This is one area that can actually be a crime when it comes to furnishing records to the IRS. According to an article on Forbes about keeping records:
Destroying records can be a crime – and you don’t need additional charges. Once an investigation is opened, an IRS special agent will attempt to gather facts and evidence. That may include interviews of third party witnesses, conducting surveillance, executing search warrants, subpoenaing bank records, and reviewing financial data.
Don't Go It Alone
Legal representation is essential for a variety of tricky proceedings in life like bankruptcies, divorces, and real estate transactions. A lawyer is also an essential ally when you have a problem paying your taxes, and the IRS has started an investigation about your ability to pay taxes.
Fortunately, the IRS has undergone some changes in recent years. Unless you ignore all your mail and are completely in the dark regarding the plans the IRS has for your assets, a wage garnishment or asset seizure won't occur without ample notice.
According to a publication from the IRS:
In its latest effort to help struggling taxpayers, the Internal Revenue Service today announced a series of new steps to help people get a fresh start with their tax liabilities. The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens.
Also, remember that the IRS won't put you in jail if you have legitimate problems coming up with the money to satisfy your tax debt. There are no debtor's prisons in the United States, and jail is only ever an issue if the government decides and can prove there was criminal intent.
If you cheat on your taxes, you may face jail time. If you lie to the IRS, you might have some legal trouble. The IRS wants you to pay your taxes, and would like to avoid lengthy and costly legal proceedings. As long as you don't hide from your tax debt, you may find a solution that may include:
- Bankruptcy (only for certain taxes)
- Hardship suspensions (temporary suspension of collection efforts)
- Installment arrangements (monthly payment arrangement)
- Offer in Compromise (partial payment of the total owed to satisfy the debt)
Unable to Pay Your Taxes and Afraid of the IRS?
Are you considering bankruptcy as a way to satisfy your tax debt or other unpaid debts? You'll want to download our Free eBook: 12 Things You Should Know Before Filing Bankruptcy.
DISCLAIMER: All information on this website is provided for informational purposes only and is not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein or any actions taken in reliance thereon.