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Past Due Taxes: Consequences and What to Do

April 21st, 2010 by Filed under: Unfiled Taxes

past due taxesPast due taxes are any taxes that remain unpaid after the filing deadline of April 15th. Individuals can find themselves in the position of owing past due taxes for many reasons; from an from an unexpected illness that prevents an honest person from timely filing their return to the career criminal who has never filed a tax return and never intends to. In some cases the taxpayer could be missing out on a possible tax refund but in other many others people are simply trying to avoid paying their tax obligations and are only interested in their own financial gains with little concern for the people they are defrauding and its consequences.

Consequences and Penalties of Past Due Taxes

The consequences for past due taxes vary as greatly as do the reason for the past due taxes and amount past due. Plainly speaking failing to file taxes is criminal behavior. An individual who has past due taxes can expect anything from a slap on the wrist paltry penalty fee to wage garnishing to lengthy prison sentences and seizure of any and all assets. In general a taxpayer can avoid almost all consequences of past due taxes simply by filing any past due tax returns as soon as possible, as long as they are filed before the Internal Revenue Service catches on that they have not been filed. If you owe millions and have not filed any taxes in years, you can expect the Internal Revenue Service to prosecute you to the fullest extent of the law with as much publicity as possible in order to scare others into filing and paying what they owe in a timely manner.

What Should You Do if You Have Past Due Taxes

As stated previously if you have past due taxes, whether you would have received a refund or if you owe thousands of dollars, you need to get the proper tax forms filed as soon as possible. Even if you have no practical idea of how you are going to pay the amount owed. It is always in your best interest to file unfiled Federal tax returns, as soon as possible, and do everything in your powers to demonstrate that you are a responsible tax payer and are willing to comply with all tax laws. Failing to file taxes and ignoring the IRS and their attempts to work with you to collect whatever is owed will only force them to take all appropriate actions under the law. Failure to file tax returns for a period of greater than three years will forfeit an individuals right to any tax refunds. As far as the courts are concerned past due tax debt supersedes all other forms of debt. What this means is that even if you are filing bankruptcy, past due taxes are the first debt that will be paid off through the process of the bankruptcy proceedings.

The Internal Revenue Service may seem like the most evil entity ever created, there primary purpose is to take peoples’ money and turn it over to the government, dealing with the Internal Revenue Service can be absolutely torturous, but I assure you they are not evil. If you chose to earn money in this country then in most instances you will be obligated to pay taxes on those earnings. If you chose not to pay those taxes, you could face forfeiture of any possessions and future earnings of you can cooperate with the powers that be and pay what you owe, if you can’t pay it all at once they will gladly put you on a payment plan and charge you interest. For the best advice anyone who finds themselves in any type of tax predicament should consult a certified tax professional immediately.


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