Death and taxes. While this may bring feelings of doom, the truth is that filing taxes to report your income is a normal process done by most Americans annually. Modern technology has also helped make filing more convenient than ever while minimizing many of the errors commonly made. If it has been a long time since you have filed your taxes, or if you haven’t paid your bill, it’s important to remember that you may end up facing a wide range of tax evasion penalties. If you’re dealing with tax fraud charges in Maryland, our Bethesda tax attorneys are here and ready to provide comprehensive assistance to help you through every step of this complex process. JDKatz is your experienced legal team, relying on experienced experts who specialize in estate planning, family law, business structuring, criminal litigation, and more. Tax law can be intimidating for many citizens, especially for those who are facing serious sanctions.
Today, we’ll continue to discuss a few of the most common consequences associated with failing to file or pay your taxes. While your outcome may seem grim, it’s important to remember that avoiding the issue will not make it any better. Remember that some people may never face repercussions, but those that are selected will face a litany of issues!
IRS Levy Payments
If you have a debt to the IRS that has not addressed, a levy can be used to permit legal seizures of certain assets to help pay that debt. This authority is often assigned without court approval and will work to acquire your valuable assets, including:
- Wage garnishments
- Bank accounts
- Property seizures
- Retirement accounts such as Social Security
- Life insurance
- Much more
During a levy, the IRS will seek to recoup your debt aggressively, but they will not impact your ability to make money, including tools and equipment, and they will normally leave resources intended for your children. Beyond this, though, expect to face serious financial strain during this time. You will be sent numerous notices before this action takes place. If you have received a “Final Notice,” it’s important to reach out to a local tax lawyer for immediate assistance!
Federal Tax Liens
One penalty that is often confused with a levy is a lien. Unlike a levy, which can take your property to repay a debt, a lien is the first step where a claim is made by the government on your property that gives the IRS leverage. If you do not pay your debt, they can seize your property. This process can be very troublesome for individuals who are trying to secure future loans, apply for credit cards, or even sign a rental lease. A tax lien appears on your credit score, so be sure to follow professional tax advice and seek out a beneficial resolution with the government. Institutions that are able to finance you will be weary if you have a lien against you, as the IRS has first rights to your property to compensate for losses.
A regular payment plan may help to remove your tax lien. If you and your tax attorney find that the IRS did not follow proper protocol when placing a lien on you, and it can be proven, your lien will be released. The statute of limitations comes into effect as well. If your debt passes this time period, the lien will have to be released.
The last thing anyone wants to see in their mailbox is a summons to meet with an IRS officer. Unfortunately, if the Feds cannot figure out your tax responsibilities, they may make it a requirement for you to come in in person and provide all of the information needed to satisfy the issue. In some cases, you may be informed about a third-party summons, an outside party with information relevant to your case may be summoned on your behalf.
Individuals who have not been filing for years due to financial restrictions may find themselves in a very tough spot once the IRS intervenes. If you have been struggling to make ends meet, bankruptcy may be one of the few remaining options. One important thing to remember about declaring bankruptcy is that it isn’t a magic redo. New laws have changed the ramifications of your responsibilities post-bankruptcy, leaving some citizens with little choice and no positive outcomes. The IRS may play a lien on you, which they can choose to pause until after this process, giving you time to start again to begin working on your tax debt.
While most Americans will not have to worry about this consequence, those convicted of willful tax fraud can expect serious penalties. The IRS rarely seeks out jail time for regular offenders. Instead, they focus on those hiding a lot of money or those who have a history of abusing the system. The consequences for each case vary, so if you’re worried about your potential jail time, be sure to reach out to our tax representatives for legal assistance!
Keep in mind that the IRS has 10 years to collect back taxes. While your return is limited to three years, the government will have a decade to pursue tax liabilities, utilizing a wide range of strategies and impositions to gain compensation. If you have been forgetful in paying your taxes, be ready to settle in for the long haul.
Regardless of your current standing with the IRS, it is often highly advised to seek out remediation. The US tax agency will likely be more favorable in your case if you come to them for help.Those that commit willful tax evasion may face serious penalties compared to those of a less-serious nature. If you’re in need of a qualified tax attorney in Maryland, JDKatz is here to help! Our team of Bethesda tax lawyers will work hard to provide complete representation for your case, working with you and the IRS to find the best possible outcome. Contact us today if you’re in need of assistance!