IRS: what happens if you do not pay your taxes in the United States

If you don’t have the money to pay your taxesyou should consider how you can pay the Internal Revenue Service (IRS) and what the consequences are for doing so.

In the United States, the payment of taxes is mandatory and everyone who lives in that country must declare and pay taxes, even if your immigration status is not legal. Find out more about what happens if you don’t pay taxes and how you can avoid suffering its effects.

WHAT HAPPENS IF I DON’T PAY MY TAXES?

If you default on your taxes, the IRS will likely send you several letters soliciting and offering offers to set up an online payment plan in case you don’t have enough funds to cover the full debt. However, if you do not do your taxes, these are the consequences of tax evasion in the USA:

• Fines and interest.
• Encumbrances and embargoes on your property and assets.
• They can revoke your passport.
• It affects your credit score.
• Debt collection by private agency.
• IRS audit.
• Go to jail for tax evasion.
• Expenses add up.

WHAT ARE THE PAYMENT PLANS LIKE?

Online payment plans include:

• Short-term payment plan: the payment period is 120 days or less and the total amount you owe is less than $100,000 in combined taxes, penalties and interest.
• Long-term payment plan: the payment period is longer than 120 days, you pay in monthly payments, and the amount you owe is less than $50,000 in taxes, penalties, and interest combined.

WHAT IS THE PENALTY FOR NOT REPORTING MY TAXES?

Next, according to the Internal Revenue Service (IRS), this is the penalty for not filing the tax return as follows:

• The penalty for failing to file a tax return is 5% of unpaid taxes for each month or part of a month that you are late in filing your tax return. The penalty will not exceed 25% of your unpaid taxes.
• If the failure to file the tax return penalty and the failure to pay penalty apply in the same month, the failure to file the tax return penalty is reduced by the amount of the failure to pay penalty for that month, by a penalty combined 5% for each month or part of a month that your return was filed late.
• If after five months you still have not made the payment, the penalty for not filing the tax return will reach the maximum amount, but the penalty for not paying will continue until you pay the tax, up to a maximum of 25% of the unpaid taxes to the expiration date.
• If you were more than 60 days late in filing your return, the minimum penalty for failing to file will be $435 (for tax returns due in 2020, 2021, and 2022) or 100% of the tax required to be shown on the return, whichever amount is less.

WHAT HAPPENS IF I AM ILLEGAL AND DO NOT MAKE TAXES?

If you are an illegal immigrant and do not file your taxes, you are violating the federal laws of the United States. Consequently, if you do not file your taxes, you will be committing a crime and you will complicate your immigration status.

MORE INFORMATION ABOUT THE PAYMENT OF TAXES

CAN THE IRS FILE THE RETURN FOR ME?

That’s how it is. The IRS can do the filing for you, as they can obtain copies of your income forms (W-2 or 1099-MISC) and file them on your behalf. However, it is best to file your taxes yourself because you may be entitled to tax deductions and credits that the IRS is not aware of. With this, you could lose the refund for not filing the return.