{"id":172929,"date":"2023-03-27T05:00:00","date_gmt":"2023-03-27T12:00:00","guid":{"rendered":"https:\/\/www.creditsesame.com\/?p=171612"},"modified":"2023-03-27T05:00:00","modified_gmt":"2023-03-27T12:00:00","slug":"what-if-you-cannot-pay-your-taxes","status":"publish","type":"post","link":"https:\/\/www.creditsesame.com\/blog\/debt\/what-if-you-cannot-pay-your-taxes\/","title":{"rendered":"What if you cannot pay your taxes for 2022?"},"content":{"rendered":"\n

Credit Sesame discusses options if you cannot pay your taxes due for 2022.<\/em><\/p>\n\n\n\n

Famously, the U.S. Treasury Department developed tax evasion charges against Al Capone<\/a> after the federal government could not build a criminal case against him for murder and other crimes.\u00a0<\/p>\n\n\n\n

Capone was convicted of tax evasion in 1931. He served seven and a half years of an 11-year sentence, and paid court fines and $215,000 plus interest due on back taxes before being released from federal prison on Alcatraz Island in San Francisco.<\/p>\n\n\n\n

This is unlikely to happen to most people who cannot pay their taxes in 2023. Few people are charged with tax evasion and the IRS offers multiple warnings and chances for payment. Still, the memory of Capone is an intimidating reminder.<\/p>\n\n\n\n

Unable to pay your taxes<\/h2>\n\n\n\n

What if you are not trying to evade your taxes but can\u2019t afford to pay them? Is that a crime? Yes, though it\u2019s likely a civil case that will result in a notice that you must pay back your unpaid taxes, plus interest and penalties. Prison is unlikely, though legally you could be sent to prison for one year for every year you don\u2019t file.<\/p>\n\n\n\n

Not paying taxes you owe is a crime<\/h2>\n\n\n\n

Failing to file your taxes is against the law. Intentionally lying on a return or trying to deceive the IRS is tax fraud and you could be charged and convicted of tax evasion<\/a>. The maximum penalty is imprisonment of up to five years and up to $100,000 in fines.<\/p>\n\n\n\n

If you do not pay your taxes, you could also be charged with a crime, though the IRS first tries many methods to get the money that you owe from you.<\/p>\n\n\n\n

What if you file a tax return this year and owe taxes but cannot afford to pay them? What can you do?<\/p>\n\n\n\n

Don\u2019t ignore IRS notifications<\/h2>\n\n\n\n

Firstly, do not ignore IRS communications. The IRS wants the money you owe, and ignoring its letters and not paying could lead to a court case against you.\u00a0<\/p>\n\n\n\n

It could place a lien on your property or assets, and eventually your property could be seized to pay your bill. Your wages could be garnished, or it may withdraw money from your bank accounts. An unpaid tax bill could also be deducted from any future tax refunds you\u2019re owed.<\/p>\n\n\n\n

Before the IRS takes legal action, it gives you several chances to pay. It first sends you a letter, giving you time to pay or to challenge the notice. The letter arrives via standard mail, never as a phone call or e-mail.<\/p>\n\n\n\n

There\u2019s a 10-year statute of limitations on the IRS to collect a liability from the date of assessment. After 10 years the IRS can no longer try and collect taxes you owe. However, there\u2019s no statute of limitations on tax fraud, so if you intentionally try to defraud the IRS, you could still be charged with a crime at any date in the future.<\/p>\n\n\n\n

Payment plans available if you cannot pay your taxes<\/h2>\n\n\n\n

The IRS has options<\/a> if you can\u2019t pay your taxes all at once. You may qualify for a self-service, online payment plan<\/a> so you can pay off what you owe over time.\u00a0<\/p>\n\n\n\n

You get immediate notification of whether your payment plan has been approved without having to call or write the IRS. This option is quicker than asking for a payment plan when you file your tax returns electronically, even if the new tax hasn\u2019t been assessed yet.<\/p>\n\n\n\n

Payment plans include:<\/p>\n\n\n\n