Out of the many financial mistakes, you can make in life, mishandling taxes remains in the top three. It’s never too late to pay taxes, and the IRS never forgets money it is owed. Before you lose any more ground in the fight, consider hiring tax attorneys who offer complete solutions. There are options, but you won’t get far without someone by your side that has tax knowledge.
Penalties
The first penalty you’ll face has to do with a failure to file. As an individual, this is one of the most ridiculous penalties to get hit with. In order to get a failure to file, you’d have to purposely miss multiple extension dates.
Getting a failure to file penalty is like running multiple red lights in a row while driving backward. The good news about a failure to file penalty is that it starts out at a modest five percent of unpaid taxes each month. The bad news is that the five percent is the minimum, while twenty-five percent is the maximum.
Complications
Paying the IRS back is never as simple as dropping a check in the mail. For obvious reasons, you want to have all of your paperwork current. That means contacting the IRS about what you owe, even if you have recent snail mail directly from the office. There have been many cases where a letter delivered from the IRS had old information concerning penalties and money owed. An individual paid the amount in the letter, only to get another letter a month later with an additional unpaid balance, and interest accrued.
Even if you’re trying to fix things out of tax season, the phone lines are not always open. Long wait times are common, so in-office visits become a better time-saving option. Instead of getting hit with random disconnects after a long wait time, you get the pleasure of taking a day off to handle the tax business. It is a huge waste of time and money for everyone involved, but completely avoidable.
Jail Time
In order to face jail time for unpaid taxes, you have to show an unbelievable amount of contempt for filing. In this particular case, individuals in the high-income bracket that avoid taxes will stand out like a sore thumb. Tax evasion is somewhat forgiving for people who don’t have the means to pay the IRS back. That doesn’t mean wages won’t be garnished, it just means there is more wiggle room for payments.
In either case, no one should tempt the ire of the IRS by not paying taxes. Jail time can be in excess of five years, and that goes for anyone that helped you to avoid paying taxes. When the government decides to go after individuals for tax evasion, they have up to six years from the date of the violation to pursue.
Wrap Up
Everyone has a story to tell when it comes to their tax situation. If you spend year after year submitting tax returns late, then consider making a change for the better. There is no way to avoid the money you owe, so it’s a good idea to get the hard part over with.