How serious does the IRS take unfiled taxes?

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Many of my clients don’t realize how serious the IRS takes unfiled taxes until the consequences start to pile up. Not filing your taxes in time can lead to a variety of problems including collection actions and penalties. By the time taxpayers contact me, they’re usually in financial distress. They also are facing severe consequences and looking for legal solutions to their tax situation.

Huge Financial Penalties

The severity of consequences varies from one situation to another and is dependent upon a taxpayers situation.

IRS penalties are much more significant for those that never filed taxes versus those that have unpaid taxes. In fact, the penalty for not filing taxes is 10X greater than just having unpaid taxes.

If taxes remain unfiled, the IRS may use a substitute tax return to determine liability. In most situations, a substitute tax return will result in higher taxes. The higher amount owed is because deductions are not taken into consideration. The greater the assessed tax liability; the greater a client’s tax liability will be.

Methods Used by Taking Authorities to Collect Tax

Once the IRS has determined your tax liability, they will begin to take steps to collect unpaid tax. It’s important to remember a person’s tax problems will never go away. The IRS will continue to try and collect unfiled or unpaid taxes until you pay in full. Methods used by the tax authority include:

  • Tax lien
  • Wage garnishment
  • Bank levy
  • Property seizure
  • Jail time

If you are facing tax consequences, a tax attorney can help. Attorneys can negotiate with the IRS on your behalf. When hiring a lawyer to help settle your tax penalties, you can hope to get the best solution possible. The end goal is to decrease your financial hardships and help you avoid more serious tax penalties.

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