Facing Tax Problems
7 Ways that Unfilled Tax Returns Can Haunt You
If you’re facing tax problems, you know how hard, and stressful, they can be. When you deal with the IRS, the FTB (Franchise Tax Board), the BOE (Board of Equalization), or the Employment Development Department, you’re up against an opponent that has massive resources and no mercy.
Some people think they can’t win and simply give up, hoping their tax problems will just go away, but by doing that, tax agencies can add penalties and interest on a daily basis. Once the collection process starts, it’s a process that can literally seep into every aspect of your life and work. An IRS tax lien can also be a black mark on your credit report, making it virtually impossible to secure a loan. Our team of financial advisors can provide you with the knowledge and support to help you overcome these obstacles.
Consequences or Implications
The collection process starts by sending a letter demanding payment and assessing additional penalties and interest. Normally after multiple letters and taxpayer inaction, harsh collection tactics begin.
Below are a few of the methods that may be used by the taxing authorities to collect unpaid taxes.
Tax Lien: A tax lien is the government’s claim on the taxpayer’s property. The existence of the lien ensures that they get first rights to your property over other creditors.
Wage Garnishment: The taxing authority will contact your employer and demand they withhold a certain percentage of your pay to cover unpaid taxes.
Bank Levy: The tax authorities will contact your bank and demand a hold be put on the funds that are in the account and then seize the funds to cover the unpaid tax liability.
Property Seizure: The tax authorities may seize assets such as your car, boat, house or other asset of value that can be sold to cover the unpaid tax liability.
Jail time: Incarceration is possible but very unlikely. Depending on the circumstances, taxing authorities can have a taxpayer arrested and put in jail.
Revocation or Denial of Passport
IRS Will File a Substitute Return (SFR)