The Ugly Truth About Not Paying Your Tax Debt

1. The Ugly Truth About Not Paying Your Tax Debt Tax day has come and gone and yet you have either not filed your taxes or you are ignoring the amount that is due, therefore creating a tax debt. While this might not seem like a bad thing at the time, the IRS, a bureau of the government, can take numerous steps to collect this money and you have very little say in it. Do you think that you are safe from being harmed when you owe tax debt? Take a look at some of the things that can happen when you owe a debt on your taxes. Notices, fees, and interest When you do not pay back on the debt that you owe, you are going to start receiving notices from the IRS. While this is often nothing more than annoying, it is meant to alert you to the issue and have you send in the payment before fees and penalties begin to accrue. And the fees can be high. To start, with the penalty on your debt will be at least 5 percent of what is owed, with the minimum being $135 of penalty. Plus, there is also interest of somewhere between 4 and 6 percent charged to the debt. These numbers add up fast to being much higher than the original amount. Forfeit your refund Any time that you receive a refund after that year, that money will go back to the IRS. For example, if you owe money for your 2013 taxes, but your circumstances change and you will be receiving a refund for 2014, that money will be returned to the IRS to pay what is owed. If the refund is high enough, you might get some back, but the IRS gets its cut first. Tax Liens For those who own any property, this can be an issue. The lien is going to state that the government will be using any property you own as collateral for what you owe for tax debt. If you pay it off, the lien can be lifted but if not, the property could be sold off to pay your debt. There are various things that can count as property such as your car, house, income, and even your bank account. The IRS can take claim to these forms of property and use them to pay back what is owed if you do not submit the proper paperwork and just ignore the debt. Credit report The fact that you owe money to someone, much less the federal government, is going to cause some havoc on your credit report. Also, that lien that you have faced before can also show up to landlords, bosses, and other creditors you may be working with. And this will never be seen as good debt so there is no way to get out of the situation. Receive Summons

2. In some cases, the IRS may have some issues with sorting out what you owe. When this occurs, you will be given a summons, or a requirement to appear. During this time you will meet with an officer from the IRS and be required to bring documents and records; in some cases you may need to testify. Third parties who have information relevant to your taxes may also be summoned instead of you. Declare bankruptcy This usually does not happen until worst case scenario arrives, but when you are not able to pay your taxes and other option are not working; you may have to declare bankruptcy. This will usually happen to those who are finding it difficult to stay afloat with other bills and who did not pay taxes for a number of years so they could try to pay these bills. In some cases, the debt can be removed as long as it is not a tax lien yet. Call the lawyers at Gordon Law Group if you have dealing with a tax debt. The lawyers at Gordon Law Group and the experience necessary to help you find out if the debt is yours and will give you the representation to help when you need. CONTACT US (Open 7 Days for Calls) 180 N. LaSalle Street, Suite 3700 Chicago, IL 60603 Local: (312) 608-2772 Referral Link: https://www.chicagotaxlawyerfirm.com/tax-debt/