The IRS is aware of the fact that there are many taxpayers that do not pay on time. Believe it or not, there are millions of Americans that do not file their tax returns. There are many taxpayers in the USA that do not want to pay their taxes or cannot afford to pay them. For one reason or another, they do not pay it.
Ignoring their tax liability may result in an IRS penalty. However, not everyone is in the same situation. Some people may be ill and in hospital. They do have a reason to forget about filing because health comes first. Others may have so much work in their business that cannot keep up with the earnings and sales records.
Temptation is always there, whatever the reason might be. The IRS takes the payment of taxes seriously and they even offer extensions to those who cannot file because of a natural disaster in their area. Even if you have not got such a compelling reason, you may get an extension until October 16 if you pay your taxes.
What if I do not pay taxes to the IRS before the deadline is over?
First of all, you will receive a notice from the IRS. This warning is to let you know you owe the Failure to Pay Penalty. There you will find out the reason why they sent you this notice. Moreover, they will provide you with some instructions. They will tell you what to do next to deal with this situation. You can agree or not.
If you agree with what it states, there is no need to contact the IRS. On the other hand, some taxpayers believe that information is not accurate or true. Thus, they can contact the IRS. Make sure the notice you receive is not suspicious. There are many scams going on during the tax season. Avoiding them is essential.
Report it if you are sure it is fraudulent. In this way, the IRS can help prevent more people from being deceived. Getting a large print or Braille notice is also possible if you claim it. The Information About the Alternative Media Center is in charge of it. Form 9000 will allow you to do so and tell your preference.
What happens if you ignore the warning and do not pay taxes?
The longer you do not pay the taxes, the higher the penalty will be. It will definitely depend on the amount you owe. The percentage might be the same, but not the total amount you will owe the IRS. The penalty charge will be of 0.5% for the amount you have not paid for each month. It could be part of a month too.
It will not exceed 25% of the total amount you have not paid. Some taxpayers file their tax returns but they forget to pay the taxes. Others do not file and do not pay. In that case, not only will you have to pay a Failure to Pay Penalty. Added to that, there will be a Failure to File Penalty. That could be 5% of the unpaid taxes.
Things will become to become tougher if the taxpayer insists on not paying. Delinquents may face a levy on their bank account. However, the IRS will allow you to have 21 days to sort payments out. Hopefully, you have enough time to be able to pay all the money in taxes you owe the IRS.
What else could happen if I still do not pay taxes to the IRS?
The IRS could take part of your monthly paycheck. That is bad news because wages may not be enough in full. Having already a tight budget could make things even worse. They will use that money to pay what you owe until the debt is over. So, make sure you do not end up having your wage reduced in this way.
Having a property may also be a reason for the IRS to take it. However, it will not be for lower amounts. Those who owe 10,000 dollars or more than that can face a property lien. Once more, it is legal to do so, just like the aforementioned things. Even if you sell the property, you cannot get that money.
Losing your passport could be another negative consequence. In theory, you could also go to jail. Being a millionaire and neglecting your tax liability could lead to that unwanted event. Seizing your property could also be possible. They may take the money from a refund if you do not pay taxes as well. Pay it as soon as possible to avoid all these misfortunes.