Tax evasion is a crime and if you are caught, severe consequences may follow. We have all heard of celebrities going to jail for not paying taxes and today we decided to discuss this topic so you could know what may happen to you if you decide not to file when you are legally compelled to do so.
If you thought your tax bill was bad by itself, it is going to be even worse if you don’t file. You will be hit with two penalty fees – failure to pay and failure to file. These fees can raise your total outstanding debt to very high levels.
The IRS is not allowed to waive interest charges. Therefore, even if you can work out some sort of deal with them on your tax bill, you still are going to be responsible for paying the interest charges.
If you owe the IRS money when you do qualify for a refund, you are not going to get it because you owe them money. The good news is it will go towards your outstanding debt, but if you were counting on your refund for another debt, you will have more financial problems already on top of your current debt problem.
Lose Your Social Security
The IRS can seize some of your assets and social security happens to be one of them. Your children may need that one day and unfortunately they may not be able to receive it if you evade your tax obligations.
Image credit: Jeremy Brooks