Does anyone have an example of a worst case scenario for years of not filing tax returns/not paying taxes? What do you think would happen to the individual? Does the DOJ routinely impose sentences for imprisonment? Or is it more likely that the IRS would simply fine the person and demand payment in full for all taxes, penalties and fines? If they sentence the person to prison, how likely is it that they will be able to begin paying restitution?
Of course this circumstance assumes that the person is a U.S. citizen, fully aware of the obligation to pay taxes, yet willfully neglecting to file/pay.
BizResearcher | Window Shopper |
5/11/2010 - 11:12 am
If a person is entitled to a refund in the years they didn't file, the IRS won't come after them. The IRS is happy to keep the money. However, if the person owes money in past years, the IRS will determine the situation and apply appropriate measures. If there is any possibility the person is willfully engaging in income tax evasion, they will be treated differently than the person who is struggling to pay their taxes.
It would be helpful is you explained how many years and how much money is involved. I don't think that $1000 per year for 2 years would result in the same penalty and 500k per year for the last 20 years. So it helps to have some framework.
Worst case is a prison sentence. This is probably not real likely if you contact them before they find you, file back returns and make arrangements to pay.
High profile people, and formal tax protesters, are more likely to end up in jail than the common guy who would probably get fined instead.
A person in this circumstance would be wise to consult a tax attorney before doing anything else.
Worst case is a prison sentence. This is probably not real likely if you contact them before they find you, file back returns and make arrangements to pay.High profile people, and formal tax protesters, are more likely to end up in jail than the common guy who would probably get fined instead.A person in this circumstance would be wise to consult a tax attorney before doing anything else.
I know someone who just filed returns for 1998-2005. they ended up owing about $75,000 total. The IRS just kept sending letters and evenutally starting taking withholding out of their dividends and bank interest. They just got a notice that they have to appear in tax court for 2001. I think there is just penalities and interest(a lot-would have only owed about $50,000). No threat of jail time for them.
BizResearcher | Window Shopper | 5/11/2010 - 11:12 am
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