Unpaid Income Taxes

Inevitably, there are thousands of taxpayers each year that do not file their personal or business income tax returns, for a variety of reasons.  Some taxpayers feel that they will be unable to deal with a large tax bill to pay, while others simply don’t wish to go to the time and expense of filing their tax returns.  Other taxpayers fail to file tax returns due to personal and/or business troubles, or because of anti-government sentiments.  Whatever the case may be, however, there are significant potential repercussions for taxpayers who fail to file income tax returns.  Nonetheless, there may also be some appealing solutions for those taxpayers who have failed to file tax returns.

Penalties for Unpaid Income Taxes

First, keep in mind that not paying your taxes, or setting up a payment plan with the Internal Revenue Service (IRS) to do so in any given year can result in paying a much larger amount in the future.  Not only can the IRS collect any taxes that you did not pay, but it also is entitled to collect interest and penalties on the amount that you owe.

Next, if you have knowingly failed to file a tax return, especially over a period of several years, if you have not voluntarily come forward to pay your delinquent taxes, if you do not cooperate with the IRS in paying your taxes, and/or if your income is derived from any illegal sources, you could be subject to criminal prosecution, which can result in fines, penalties, and incarceration.

Finally, the IRS has a number of techniques available to identify taxpayers who have failed to file tax returns as required by law.  After delinquent taxpayers are identified, the IRS can collect delinquent taxes from you in a number of ways.  For instance, the IRS can garnish your wages, seize your assets, and withhold future tax refunds, all in order to pay off your back taxes.  The IRS also can report your debt to the major credit bureaus, and impose federal tax liens on any property that you own.

How to Settle Unpaid Tax Disputes

Fortunately, the IRS is often willing to work with an individual and/or business that has voluntarily come forward and cooperated in dealing with delinquent taxes.  In many circumstances, you may be able to negotiate a settlement with the IRS, which can result in a greatly decreased amount of back taxes that you must pay.  In this regard, utilizing a tax professional can be very helpful in reaching a reasonable settlement of your tax debt with the IRS.

While paying your tax liability in full is your best option, you may be able to work out a monthly payment plan with the IRS if you simply do not have the funds available to pay the debt in full.  By entering into and adhering to a monthly payment plan toward your debt, you can avoid additional adverse actions by the IRS against you for your delinquent taxes. 

How a Tax Attorney Can Help

When your overall tax liability is high, and you fear that you may face criminal prosecution due to your failure to file personal and/or business taxes, you are well-advised to contact an experienced tax attorney in order to help you deal with the IRS.  A tax attorney may be able to help you avoid criminal prosecution, and negotiate a settlement with the IRS that may substantially reduce your potential tax liability.