You don’t want to be in trouble with the IRS. This is one of the most powerful agencies in the government because they can go after you in ways you couldn’t imagine. The following are some things that could happen if you have unpaid tax debt.
One thing that’s going to happen to you and your family is you’ll receive notices from the IRS. These are just letters, and that may not seem like a big deal, but everyone in your family will know you’re getting them.
Reading them can stress you out and cause some grief. It’s like carrying a boulder around that gets heavier with each letter. It is never wise to ignore these letters and hope the problem goes away because it won’t.
Dealing With a Tax Lien
Sometimes, when you owe the government taxes, the IRS files a public Notice of a Federal Tax Lien. This is placed on all your property, and this includes your home and other assets. In essence, it’s telling the world that you owe money. The IRS has an active interest in your assets as they could be used to pay off your debt to the government.
On top of this very public alert, you might not have access to credit because of this lien. You and your family are going to deal with major financial restrictions that could make everything feel worse. If you’re in this position or you fear that it might happen soon, you need to make an arrangement as soon as possible to protect your family.
Another thing that could happen is that your refund is taken from you. If you and your family expect a refund but you owe taxes, then you might not see this money at all. It’ll be taken to pay some or all of your debt.
A lot of families depend on that financial boost for various things, but now you’ll have to explain to your family why you don’t have that extra cash. You don’t want to be in this situation and you don’t have to if you work something out with the government beforehand. Talk to a tax specialist so that he or she can help you if you received a letter stating your refund might be taken.
The next thing you have to worry about is an IRS levy. If you go long enough without paying what you owe, the IRS has the power to garnish your wages, and that’s one of the scariest things that could happen to you and your family. You depend on this money to pay your bills, feed your family, and to live.
Now, the IRS isn’t completely heartless. They know you need this money and are willing to work with you, but you’ll need an IRS levy release service to help you through this. You’re going to have to figure out a way to meet the government halfway so that they don’t continue to take your money out of your hands.
Penalties and Interest
The debt you have won’t stay the same as you ignore it. The IRS can add penalties and interest to what you owe the longer you owe it. If you’re having trouble paying what you owe, imagine how much harder things will be if that balance starts to grow.
Every year, the interest rate is going to grow by a total of five percent, which is a significant amount. The penalties associated with unpaid tax debt doubles to one percent each month you don’t pay it. If you can make an arrangement, the penalty rate drops to .25 percent each month, which is much better.
If you or your family wants to travel abroad, you might not be able to. The IRS can restrict travel if you don’t pay your taxes for a long time.
Now, this usually happens when you owe a significant amount to the government. The good thing is the government won’t do this if you talk to them and figure something out.
Talk to a tax specialist as soon as you can if you’re dealing with unpaid tax debt because you can get into serious financial trouble otherwise. You and your family shouldn’t have to go through this, and you’ve got paths to make things a little easier.