Failing to file your taxes can result in a variety of penalties and consequences. The most common penalty is a late filing fee, which can add up to 5% of the unpaid taxes for each month that the return is late, up to a maximum of 25%. In addition to this penalty, interest will also be charged on the unpaid taxes until they are paid in full.
If you owe taxes but don't file a return, the IRS may file a substitute return on your behalf, which will likely not include all of the deductions and credits that you are entitled to, resulting in a higher tax bill. The IRS may also place a tax lien on your assets, which can make it difficult to sell or transfer property until the tax debt is paid.
If you continue to ignore the IRS, they may take more aggressive actions, such as seizing your bank account or wages, or even taking legal action against you. It is important to file your taxes on time, even if you are unable to pay the full amount owed, as there are options available to help you pay off your tax debt over time.
When the Internal Revenue Service (IRS) puts a tax lien on your assets, it means that they have a legal claim against your property. This is a serious matter that can have significant consequences.
Firstly, the IRS will file a Notice of Federal Tax Lien which will be visible on your credit report. This can negatively affect your credit score and make it difficult for you to obtain loans or credit. Additionally, a tax lien gives the IRS the right to seize your assets in order to pay off your tax debt. This can include your bank accounts, real estate, and other personal property. The IRS may also place levies on your wages and accounts receivable, making it difficult for you to access your own money.
While a tax lien can be damaging, there are ways to resolve the issue. You can work with the IRS to negotiate a payment plan, file an appeal, or even apply for a lien discharge or subordination. Contact us and let us help you take action as soon as possible in order to minimize the impact of a tax lien on your financial situation.
When the IRS seizes your bank account or wages, it means they have taken control of your assets to satisfy an outstanding tax debt. This is usually a last resort for the IRS, as they typically attempt to collect unpaid taxes through other means before resorting to seizure.
If the IRS seizes your bank account, they will freeze the account, meaning you will no longer have access to the funds in the account. They will then notify you of the seizure and give you a chance to respond before taking the funds to satisfy the tax debt.
If the IRS seizes your wages, they will issue a wage garnishment order to your employer, requiring them to withhold a portion of your wages to satisfy the tax debt. This means you will receive a reduced paycheck until the debt is paid in full.
You have legal rights when it comes to an IRS seizure, and you may be able to negotiate a payment plan or settlement with the IRS to avoid seizure. Contact us and let us help if you are facing an IRS seizure.