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File your tax returns to avoid tax liens, other problems

Created: On August 25, 2011 @ 2:47 pm In

If you owe a lot of tax debt you may be tempted to put off filing your return, but that is a huge mistake that can result in some serious repercussions, including tax liens.

Are you facing jail time?

While the Internal Revenue Service (IRS) doesn’t throw people in jail for not paying their taxes, you could end up in the slammer for not filing your tax return. (Actor Wesley Snipes is currently serving three years in prison for failing to file tax returns.) So even if your tax debt seem insurmountable, you need to prepare your return and get it filed by the appropriate deadline. Then, take steps to get the debt help you need to clean up your situation.

What if you can’t pay?

Keep in mind that the IRS isn’t trying to lock up everybody who can’t pay tax debt. Not filing a past due return usually results in one of the following actions:

Penalties and interest are assessed, which increases the amount of tax owed
The IRS may file a substitute return for you that may not accurately represent your situation. If this occurs, you should file a return anyway to make sure the information is correct.
Once a tax is assessed, the IRS may place a levy on wages or bank accounts, or file tax liens against your property.

Ultimately, you can’t avoid the IRS. Even if you choose to file for bankruptcy, any tax debt owed to the IRS takes priority over other debts you may owe. It’s better to contact the IRS to get help with debt than to keep avoiding your problems.

You may be able to set up a payment plan that takes into account your current income and other factors. There is a solution to your tax woes if you’re willing to face up to the problem.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2011/08/25/file-your-tax-returns-to-avoid-tax-liens-other-problems-2/