FAQs on Tax Issues
What are the legal consequences of not paying taxes?
Since it is the IRS’s duty to collect and protect the federal government’s revenue, it has the authority to bring enforcement action against delinquent taxpayers to collect the tax. This may consist of imposing liens and levies and seizing a taxpayer’s property. These are civil actions taken by the IRS. In addition, there may be criminal investigation and prosecution if the government believes there was a criminal tax violation.
What exactly is a tax levy?
A tax levy is an administrative action whereby the IRS takes your property as payment for a tax debt. This could mean taking money from your bank account or investment accounts, issuing a sheriff’s sale of your home, or seizing and selling other personal assets (like a car or boat). Generally, the IRS will not issue a levy until they have sent several notices (demands) for payment and were unsuccessful.
Obviously, this is a frightening prospect for anyone. Therefore, if you have unfiled tax returns or fear collection actions for back taxes, you should take immediate action and consult with a professional tax lawyer who can help you resolve the matter, ideally before the levy is filed.
Ms. Tanenberg has helped clients worldwide resolve challenging tax issues, including cases where the threat of a levy is in place and those where they have already been filed. You have nothing to lose by consulting with an experienced tax professional.
Are there any other negative effects of failing to file or pay taxes?
In addition to the threat of collection by the IRS, you could face repercussions in other areas of your life:
- Financial: Unfiled and/or unpaid prior years’ taxes can grow into a much larger amount because the IRS imposes interest and penalties on the amount owed. This in turn could mean you lose the opportunity to obtain a much-needed mortgage, car loan, job or apartment. The IRS may also garnish your wages or freeze your bank accounts, thereby limiting your access to funds.
- Psychological: People who come to this firm often tell attorney Tanenberg that they are not able to work, sleep or plan life events. They are afraid not only of the financial impact, but they also worry that they will suffer terrible humiliation when the IRS garnishes their wages or takes their property. Some even fear going to jail.
What is your firm’s process for resolving tax issues?
When you call Ellyn Tanenberg, Tax Attorney & CPA, the first thing Ms. Tanenberg does is conduct a phone interview to get a feel for the history of your problem as you understand it. She will likely ask you to gather up pertinent IRS correspondence and your most relevant tax returns.
Then we meet and talk about the circumstances that led to the problem. Ms. Tanenberg will look over your documents and correspondence. Based on this review, she puts together a little chronological outline of the facts and a game plan to present to the IRS by telephone while you are in her office. She will then call the IRS, prepared to negotiate the most favorable outcome.
After contacting the IRS, she firms up the plan with you for getting the returns done. As the returns are prepared, you file them, and then we decide what payment option seems most reasonable (payment in full, installment agreement or offer in compromise) if you still owe any payments. Incidentally, many times, the amounts due on the newly prepared tax returns show much less tax owed than the IRS claims.
With few exceptions, once the delinquent returns are filed, and a payment arrangement is made, the IRS problem will be under control and you can sigh a sigh of relief!
Contact Ellyn Tanenberg, Tax Attorney & CPA, for More Answers
When you need experienced tax help, contact Ellyn Tanenberg to discuss your particular questions and concerns.