What happens if you don't pay your taxes on time?

0 votes
asked Jul 18, 2023 in Law & Legal by ColeKisor (720 points)
What happens if you don't pay your taxes on time?

1 Answer

0 votes
answered Jul 18, 2023 by Caldecott (25,160 points)
If you don't pay your taxes on time then the IRS will add penalties to your IRS income tax owed which is most often 5% of the unpaid taxes each month or for part of the month that a tax return is late.

Penalties for unpaid taxes to the IRS won't exceed 25% of the unpaid taxes.

Going to jail for not paying taxes is possible in some cases although most times you just have things taken away such as home, car, etc to pay back the IRS debt or you have your bank account levied or seized or part of your income garnished.

If you fail to report income tax then you can go to jail or even prison so always report the income taxes and if you don't know how to figure your income tax to report it then you should hire a tax preparer such as H&R block.

In some cases you can go to jail for not paying taxes and you can even go to prison for failure to pay or report income taxes.

Whether you can go to jail or not for not paying taxes depends on the type of taxes you haven't paid.

If you run a business, collect sales tax and don't pay the sales tax then yes you can go to jail and have your business closed and locked up.

That's called withholding sales tax which can land you in jail or prison for awhile plus be hit with a lot of fines and the loss of your business.

If it's income tax you owe to the IRS then no you cannot go to jail for owing the IRS money.

If you owe the IRS money and cannot pay then they may try to seize bank accounts, freeze bank accounts, seize other property or garnish your wages but the IRS has to take you to court and sue you and win the judgement first.

The only way that you can go to jail or prison because of income tax is if you don't file the income tax at all or you provide false information in order to fraud the IRS and avoid taxes.

But you cannot go to jail or prison for simply owing the IRS money.

102,622 questions

97,753 answers

1,295 comments

7,008,062 users

...