This time of year many people don’t have enough money to pay their taxes and aren’t sure how it should be handled. Perhaps you’ve gone years without filing an Income Tax Statement at all – and now you’re ready to play catch up. DebtPrison.Net doesn’t offer legal advice. The information found in this article is available on various websites across the web. The correct answer to ‘Can I go to jail for not paying my taxes?’ is……yes you can. But there are ways to avoid time in prison. Overall, the best strategy is to file an income tax form and let the IRS know that you cannot pay the money at this time. At least they are aware that you cannot pay the money and they know that you know… just be up front.
**Disclaimer – Debtprison.net does not administer legal or financial advice. The contents of this website are my opinions on collection agencies and how to deal with them. Nothing on this website should be interpreted as legal advice or council. No opinions on this website should be used to replace the advice of your financial advisor or your legal council.
Do I have to pay a Federal Income Tax?
You may not have to pay an Income Tax, but you do have to file an Income Statement – like IRS Form 1040 if you received any income in the prior year which is taxable. State and Federal Laws are set up to bring criminal charges against you for failing to pay income taxes. In the United States you have to file a Federal Income Tax Statement if you received earned income. So if you only receive Social Security payments, you don’t have to file an Income Tax Statement. In most states you also have to file a Resident Individual Income Tax Form, like this one.
Perhaps you’ve heard some people say that you don’t have to file an Income Tax Statement. Some people say the IRS is illegal, unconstitutional, and downright unfair. Although all of these things may be true – you will still go to jail for failing to file – if the IRS can prove that you purposely failed to pay your required tax. These would be criminal charges and you could serve time.
What you should do
If you have earned income…….file a 1040, even if you end up owing tax and can’t pay. I highly recommend turbotax, it’s online and I use the free edition – costs nothing to use and you can file electronically. If you can’t pay it’s alright, you can pay later. One of my good friends is currently behind, he owes the IRS $500.00 bucks from 2006, he hasn’t paid them yet, but is paying them back this month.
Chances are there is an IRS office located at the local Federal Building in your home town. There are IRS professionals there who can help you fill out the correct forms and set up a payment plan if needed.
Make sure you are honest
Many people get in trouble because they failed to report all of their income to the IRS in a prior year. Or perhaps you took some deductions that you legally weren’t entitled to (claiming your brother’s kids as dependents – and he’s claiming them too). If you lied on a previous Income Tax Statement it better be an honest mistake. If it appears to be a mistake the IRS may let you off with taxes and penalties. But if the IRS finds a pattern of income deception (trying to hide income) you may end up paying in more ways than one. You could serve time in prison and end up paying the tax back.
You haven’t filed in years and think they forgot about you?
Don’t make this mistake. If you ever worked for a business that filled out any paperwork when you were hired – the IRS has a record of your employment and income with this employer. Your name, like many, is flagged in the IRS database as an Income Tax Evader. Believe me they are simply giving you enough time to hang yourself. Then they come galloping in with audits, penalties, and criminal charges. Why take that chance? If you are years behind walk into your local IRS Office, sit down and have an honest discussion with them. It’s better if you come to them first.
Discuss this article, share ideas, and meet new people at Debt Prison Forums.
Related Articles
* Can you go to jail for not paying your debts?
