Back Taxes Owed
Do You Owe Back Taxes?
Imagine this: you file your tax returns, but you don’t have the money to pay in what you owe, and you think, “I will just catch up next year.” But a few years pass, and you’re still behind on what you owe. One day you receive a notice from the IRS stating that you now owe three times the original amount. What do you do?! If you’ve ever found yourself in this situation, you understand how stressful it can be. The interest and penalties that add up over time can create a scenario where paying off your back taxes feels impossible. You can either continue to ignore the interest and penalties that are piling up, or you can take action and find a solution to resolve your unpaid taxes.
Consequences of Unpaid Back Taxes
Back taxes that are left unpaid for too long may result in action being taken by the IRS. They can seize property, place liens on property, or seize assets. The IRS can also place a federal tax lien to make creditors aware, and this tax lien will remain on a debtor’s credit report for ten years. If taxes continue to remain unpaid, a tax levy can be used to seize the taxpayer’s assets, such as real estate, vehicles, and bank accounts to collect the money owed.