What happens if you don't pay your taxes? (see details)
So, I have a bit of money that I made on the side in 2009 at a hospital in town, being a model patient for first-year doctors. I was told I would be hired as a private contractor. When tax time 2010 rolled around, I had forgotten about these jobs I had done in 2009, and filed my taxes with my main day job, because this is the way it has always been for me – filing for just one job with the 1040-EZ. The IRS sent me a notice last November that I owed back taxes from the second job, because the employer had sent in a 1099 on me.
I have let it sit for months now, mostly because other things happen and it gets pushed into a corner, and I got a certified letter the other day from the IRS, again about the back tax money owed. I will, of course, pay them, since it is a nominal amount of money, but what would happen if I let it go…what would their procedure be, and how would this accrue over time? Would I end up in prison for $200?
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They can garnish your wages, or send you to jail.
I would pay the back taxes as soon as possible. The longer you wait the more interest and penalties you will pay. I had a freind that underpaid his taxes by less than a dollar that ended up paying $200 in penalties and interest.
How long does it take for a formidable amount of interest to gather?
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They can also seize your bank accounts.
You have had penalties and interest accruing since the tax was due.
It has only gathered $10 interest in a year.
The longer you let it sit, the more you will owe. Penalties and late fees continue to add up. Just refile the 1040 for that year, and pay the difference.
You pay penalties and interest, or give up your property, or go to federal prison. Get it over with as soon as possible.
Planning on it.
This makes me think of the disgruntled dude who crashed his little plane into that IRS building in Austin. Boy, does part of me sympathize with him.
Me too. But you will lose that battle. So get it over with .
Fact from fiction, truth from diction. I have never heard of anyone going to prison for that little amount unless you pissed someone influential off at the IRS. Each year here in Cali they post at some time the states biggest tax cheats and many are Hollywood movers and shakers or passed Hollywood personalities, as well as your usual businessmen etc. They owe way more than what you owed, I would suspect the net worth of some of these people that the money you owed they’d spend on dinner or a shirt and tie.
They could get from your account _but I have knew people that owed and they never got their account seized. When actor Will Smith started out and didn’t pay the government confiscated his property and attached his wages (which I believe is the more used method), or they will intercept any tax return you have coming (know that one personally because I filed an extension in 2003 and forgot to finish it up that year. Didn’t go to jail, but they did intercept my tax return and applied it to the back pay).
Prisons are full and money is short, it would cost them way more money to lock you up for the short time $200 would get you than to wait and take your tax return, but you never know.
@Hypocrisy_Central It has been my observation that the smaller tax cheats more often end up in court. The bigger cheats can usually afford to hire an army of accountants and lawyers to keep them from seeing the inside of a court.
The entire fiasco will be put on your credit reports as a federal tax lien. Even if it is paid, it will show as released on the report and still go against your credit score. It can be on your reports for 10 years.
The interest and penalty will begin to accrue quickly. Get it taken care of as soon as possible would be my advise.
http://www.irs.gov/taxtopics/tc201.html
For a real shocker, look at this list of tax deadbeats in California, and they are getting away scot free.
@Hypocrisy_Central Is that phrase tattooed on your brain stem or what? I just read an old question earlier where you used that same opening line to answer someone’s question. It just sounds cliche.
@YARNLADY If I were a politician, I would probably be able to get away with more, but I am just a librarian in SC.
@ladymia69 But you missed all the times I didn’t use it. LOL LOL
Best option pay your tax at right time right amount
OK, everyone, I KNOW it’s best to do what you are supposed to, but my question was, what happens if you don’t?
Your credit is ruined, your assets will probably be frozen (checking and savings accounts) and then taken by the IRS. You may be arrested and face criminal prosecution if the IRS decides to make an example of you.
You could be denied student loans, and any other government handouts you are otherwise eligible for. Employers will see you have a federal tax lein and hire someone else to fill the position.
You will be audited for the rest of your life if the IRS comes after you.
OK. For $200, though? This government is worse than a rotten gangster who beats down your door and breaks your shins with a billy club when he doesn’t get his money on time.
Yes for $200. But you will find at the end of the year it will be closer to $2000 that they want from you.
Like I told you, it has been a year, and the interest has been $8.
Now that you have been notified they will start adding penalties. They add up quickly.
The IRS will hit you with any and all penalties they can. Each month you fail to pay they can add another round of penalties and interest.
http://www.irstaxattorney.com/penalty.html
@ladymia69 The interest may be low, but when you add in the penalties and late fees, it could very well be 10 times the original bill.
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