The tax deadline has come and passed. While many Americans are receiving refunds or managing payment schedules, some individuals are stressing about the fact that they simply didn’t file or pay their previous bill. Unfortunately, there is a wide range of inaccuracy surrounding tax evasion. You may have heard that staying “off the grid” is no big deal, but the truth is that serious consequences are possible for anyone not complying with annual tax requirements. Tax law is often very complex, requiring citizens to be informed and aware of their obligations when claiming an income from a wide range of sources. Tax evasion penalties can be very serious, requiring you to seek out professional assistance to find an optimal outcome. As your trusted team of experienced tax attorneys in Maryland, JDKatz: Attorneys At Law is here to deliver comprehensive support through every step in the legal process. From simple tax advice to solid criminal litigation processes, we’re here to help get your life back on track.
We help clients with a wide range of issues concerning IRS fraud. If you haven’t been paying your taxes over previous years, it’s important to seek out a resolution before you face worse consequences. Many people avoid consequences for unpaid tax liabilities, but those who are inspected by the IRS may face a range of penalties. Today, we’ll briefly discuss a few of the most common consequences for not reporting your taxes. If you’re in need of experienced tax lawyers or estate planning experts, the JDKatz team is here to help.
Receiving Official Notice
One common step in the process of assessing tax penalties comes in the form of correspondence from the IRS. Citizens who do fail to pay or file at all are likely to receive a notification from their assigned IRS representative. These days, the government will give you multiple opportunities to come forward and seek an optimal solution given the current circumstances. In many cases, it helps to speak with a local tax attorney for help in navigating the process.
Some individuals may receive notice in error. When this occurs, it’s important to follow the proper procedures to ensure that you end up with a beneficial outcome.
Paying Steep Fees
If you are assessed a fee for tax evasion, expect to pay a monetary amount based on a predetermined formula. There are two different ways to be charged a fee when not doing taxes:
- Failing to file. Not filing your taxes at all can normally result in a five percent penalty of the amount owed. Expect to pay at least a hundred dollars or up to double the amount owed!
- Failing to pay. Avoiding a payment that is assessed to you can result in a wide range of penalties as well. Most fees are percentage-based.
Losing More to Interest
One thing about the IRS is that its interest cannot be changed. Much like your student loans, the government cannot change the interest assessed to you for not filing. The Feds are looking to recoup the value of time loss for you not paying the proper sum. Expect to pay the Fed’s current short-term rate in addition to the penalty mentioned above.
Facing Credit Score Problems
People often do not realize the long-term consequences of their tax penalties. One such ramification comes in the form of your credit report, which serves as a metric for determining your ability to manage and clear out loans or debt. A wide range of factors can affect your credit score, including:
- Payment history
- Length of credit history
- Number of new accounts
- Total number of accounts
- Credit inquiries
- Public records.
The last point in this list is the one our tax lawyers deal with most often. The truth is that a debt to the IRS will be treated like other debts, and will show up on your credit report. Citizens who later try to apply for an auto or home loan will like incur problems, as an outstanding amount owed to the government will not look good on paper.
There are a lot of potential problems that can result from failing to repay your taxes or not filing at all. Next time, we’ll continue this subject by highlighting more serious consequences. The IRS is not here to be the bad guy, and they are willing to work with you. However, if you are facing tax evasion penalties, it’s important to seek out professional assistance to navigate the complex waters of tax law. JDKatz is here to serve as your trusted team of tax attorneys in Bethesda and D.C. to help Maryland and Washington residents make the best of their situation and help them get their lives back in order. We offer a wide range of services, from estate planning to criminal representation, and we’re ready to help you in any way we can. Contact us to learn more!