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Yale Law School

What Happens When You Don’t Pay Taxes for Few Years

Published April 3, 2017 in Taxes - 0 Comments

There are a lot of reasons why people tend not to pay their taxes. Some of them think that they don’t owe anything or that the return that they will receive will not be worth. Whatever the reason for not paying taxes, the penalties for failing to pay taxes on time can be very serious. There are a lot of consequences and they are depending on what few things such as:

Failure to File a Penalty

When you get a penalty for something, you will be given a deadline that you must respect. Otherwise, if you don’t file your penalty on time, you will only receive even more penalties, this time for not filing them on time. In most states, the penalty for missing the deadline is 5% of that unpaid tax and you will have to pay that 5% for each month that you have missed the deadline.

Failure to Pay Penalty

You can get a penalty for not paying on time. However, this penalty is much cheaper than the failure to file a penalty, usually around .5% of the unpaid taxes that you have missed for each month.  This type of penalty will not pass the 25% limit of unpaid taxes. If you receive a letter that says you have received some kind of an extension to pay or file your penalty that doesn’t mean you don’t need to pay them, that means only that you have been given some extra time. I as a lawyer suggest that you take that extra time and gather the money that you need and pay the penalties. That is because after that extension time is up, and you don’t pay them you will receive only more penalties for not paying on time.

Back Taxes

If you have a tax liability but you are not paying your taxes, you can expect that the IRS will be contacting you and asking you to pay all of your debts. Also, you will be charged for not paying taxes for that period of time.

Prison

Going to prison is a possibility if you don’t pay any of your taxes for several years. For more information about going to prison for not paying taxes, I suggest that you ask your lawyer. However, there are plenty of ways you can avoid prison such as paying those unpaid taxes. For example, I as a part tax lawyer would be able to help you out in this situation.

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