Richard A. Lindsey, CPA Lindsey & Waldo, LLC – Certified Public Accountants
  • Avoiding the #1 Fear About the IRS

    Filed under Informational, Taxes
    Mar 17

    Inevitably, the question I get asked when I work with people dealing with severe IRS problems is “Can you keep me out of jail?” It’s one of the big fears about finally facing up to and doing something about the problem.

    Not filing your tax returns IS considered a crime. You CAN go to jail if you have not filed your tax returns OR if you’ve filed them inaccurately. You can receive one year of prison time for each year of unfiled returns and procrastinating just increases the chances of going to jail.

    The IRS doesn’t take kindly to non-filers they have to chase down. And believe me, they will eventually chase you down. Just because it’s been a few years since you’ve filed and nothing has happened, doesn’t mean you’ve slipped through the cracks. People rarely slip through the cracks. Why go through life looking over your shoulder wondering when the other shoe is going to drop, when the IRS is finally going to catch up with you and demand their money? Life’s too short to live that way.

    Even if it’s been years since you filed returns, you can still avoid prison. The more willing you are to face up to your situation and seek a solution, the more likely the IRS is to work with you. The IRS doesn’t seek to put anyone in jail that voluntarily comes forward and files old returns.

    Owing the IRS money IS NOT considered a crime. The IRS cannot send you to jail for owing money, if you’ve accurately filed your tax returns. But, don’t pop the bubbly just yet. Although jail time is arguably the worst thing that can happen, it’s not the only punishment that the IRS can deliver. By not facing your IRS debt and taking action, you could be staring into the ugly eyes of…

    • wage garnishments;
    • seizure of your car, house, or boat;
    • seizure of your bank account;
    • seizure of other real estate;
    • seizure of your Social Security benefits, 401(k)s, and IRAs;
    • seizure of cash loan value of your life insurance; and
    • seizure of commissions owed to you.

    If you have filed your tax returns accurately but can’t afford to pay the taxes owed, there are ways to pay your debt and avoid those nasty consequences listed above. But, it’s a bad idea to go it alone. Walking into an IRS office and trying to work out a deal is a recipe for disaster. It’s too easy for them to get you to say something you’ll regret later. Seek out a qualified professional you can trust.

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