IRS Tax Problems and Legal Help

IRS problems begin when taxpayers fail to pay the proper amount of taxes, fail to file their taxes, or engage in practices that attempt to escape the proper payment of taxes. IRS tax problems can includes penalties and fines for unpaid taxes, increased tax liability and interest charges assessed for the entire time that a tax payment is outstanding, as well as criminal penalties that include the possibility of jail.  In order to understand the tax laws and comply with them, it is a good idea to contact an experienced tax attorney to help navigate the sometimes turbulent waters of the IRS tax regulations.

Filing Late

For taxpayers who file their Income Tax Returns late, the IRS will assess interest, compounded daily, on unpaid tax portion.  The interest accrues starting from the date the taxes were due and compounds daily for an indefinite period of time, up until the date tax debt is paid in full.  In situations where a taxpayer filed a tax return on time but failed to make proper payment, a different late-payment-penalty will be applied that is far less steep than the interest charged for non-filing.   It should also be noted that if a taxpayer can provide evidence to the IRS that they had an extenuating circumstance that prevented them from making a timely payment; the IRS has the option to, and often does, waive all late payment penalties.

Failing to File a Tax Return

In the event that an individual fails to file a tax return altogether, the penalties are far more punitive than for people who filed or paid late.  Thus, when contemplating your options if money is tight or if you have extenuating circumstances, the IRS is far more understanding of late filers than non-filers.  The consequences for not filing a tax return include steep civil penalties by way of fines, interest and attachment of property and even wages for unpaid taxes.

Tax Evasion, Fraud, and Avoidance

For criminal tax evasion, the consequences can be as much as $25,000 per year of unpaid taxes, as well as imprisonment for each year of non-filing.  Suffice to say, if found guilty of criminal tax evasion for a 5-year period, the penalties could be as much as $1,250,000 (plus the actual unpaid taxes and interest) as well as 5 years in prison.

Taxpayers should note that even when times are tough and it is impossible to pay your tax liability, it is always better to file your tax returns and have an open line of communication with the IRS. The purpose of the agency is not to impose outrageous fines and damages; however, in situations where individuals have no regard for the law, the IRS wields a heavy fist.  The best possible choice always involves staying within the confines of the law, which translates into always filing your tax returns, even if your tax payment does not follow directly behind.

Getting Legal Help with IRS Tax Problems

Due to their increased understanding of the applicable tax laws and regulations, a Tax Attorney is able to provide helpful guidance that will explain the tax implications of certain decisions.  Generally speaking, many of the IRS tax problems that individuals and businesses encounter is due to a lack of guidance on tax issues or a lack of understanding of the applicable tax laws.  By seeking the guidance of a tax attorney, individuals and businesses allow themselves to gain from their expertise and grasp of the rules and regulations outlined by the IRS. 

The help of a tax attorney can allow businesses and individuals avoid IRS tax problems before they begin, help guide taxpayers out of problematic situations, and help ensure that future harm does not occur at the hands of a bad tax decision.  As a matter of practicality, tax attorneys can be extraordinarily effective at profit maximization, liability limiting and tax-related problem avoidance.