What Happens if I Don’t Pay My Taxes?

Some rights reserved by Tax CreditsThere are many consequences of not paying your taxes.

Let’s start with income taxes. We all know that the IRS (Internal Revenue Service) is far-reaching in its power and we all deal with the taxman one-way or another every April. At least we should. What happens if we do not pay our taxes though? That depends on why they were not paid, for how long, and how much is owed. Tax law is quite complicated—but penalties could involve fines, back taxes, or even jail time.

Some people are deliberately not paying taxes they know they owe. However, many are making accounting errors or do not understand what they truly owe on. There is also the innocent spouse defense—where, even though a spouse signs a joint return, they say they truly did not know what was going on with their taxes.

The IRS handles cases differently depending on the reasons taxes were not paid. And each individual case is different. It probably starts with an audit and a lot of discussion and then branches out from there. Having an attorney skilled in tax law might be necessary during this type of case.

Hiring a good accountant for all your accounting needs or at least for clarification of tax matters is a great idea. An accountant can help you with deadlines for filing, choosing the right forms, and with many general income tax filing questions. (There are other types of tax preparation services that might be helpful, as well.) Many attorneys are also skilled in income tax matters and could be essential to helping you with tax decisions to prevent problems later.

Many folks are also responsible for paying property taxes. Not paying your property taxes can also have serious implications. This link helps explain property taxes in Sarasota County. And this link explains property taxes in Manatee County. Both links help explain about property taxes in Florida generally—which is also found in Florida State Statute 197.22. Chapter 197 of the statutes discusses the procedures that are followed to collect delinquent taxes. This can include a payment program, auction, or other types of actions determined by local and state laws.

The state of Florida also collects sales tax. We all pay taxes for certain items at stores, and that type of sales tax should be fairly easy for the state to collect from the consumer. However, problems arise when the tax is not collected properly by the business or is transferred to the state incorrectly. Businesses must follow the proper procedures for collecting and reporting sales tax or face penalties. This link on the Florida Department of Revenue discusses sales and use taxes.

Then there are corporation taxes to collect, in addition to fees that businesses already pay in Florida. Businesses that are incorporated must file certain paperwork and pay taxes on their corporation’s income. Most businesses will be well served by hiring an accountant to prepare their taxes and advise on business tax decisions, especially when planning their business. This link on the Florida Department of Revenue discusses corporate taxes.  Not paying corporate taxes results in a larger financial burden due to fines and such.

Many think they can just write off a tax burden in a bankruptcy. Maybe so, but not always. To learn more, check out a previous entry on our blog entitled, “Can bankruptcy get rid of my tax debt?”

Attorney Christopher D. Smith is a Lakewood Ranch, Florida attorney with SmithLaw Attorneys. He concentrates in bankruptcy, civil litigation, probate, and elder exploitation cases in the Sarasota and Bradenton area. Call 941 907-4774 to learn more and to ask about our free consultations.

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