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Yes, You Can Go to Jail for Not Paying Your Taxes. What To Do if You Can't Afford Your Bill
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If you're not able to pay your tax bill by April 15, you can expecta letter from the IRSsayingyour taxes are overdue. A late tax payment can rack up interest and penalty fees, but it actually land you in jail?The short answer is yes. But it's rarely the first step the Internal Revenue Service takes to get its money. If youowe the IRS money, they'll give you the opportunity to address the issue before it escalates to this extreme. But there are legal consequences for tax evasion or continuously failing to pay your taxes on time can be consequential. TAX SOFTWARE DEALS OF THE WEEK H&R Block Free Simple Tax Returns eFile: $0 (save $0) TurboTax Deluxe 2024 (Federal and State, PC/Mac Download): $56 (save $24) TurboTax Premier 2024 (Federal and State, PC/Mac Download): $83 (save $32) TaxSlayer Classic Plan: $28 (save $10) Deals are selected by the CNET Group commerce team, and may be unrelated to this article. This story is part of Taxes 2025, CNET's coverage of the best tax software, tax tips and everything else you need to file your return and track your refund. I've been an accountant for over a decade and have helped many of my clients file their taxes. Here's what could happen if you don't pay your taxes and what to do if you can't afford to pay your tax bill.Tax evasion versus failing to pay your taxesTax evasion is when you intentionally avoid paying taxes, often by underreporting income or falsifying tax records. For instance, if you earn $100,000 annually but knowingly only report $60,000 on your tax return, that's fraud. It's a criminal act that can lead to severe consequences, including jail time. The IRS treats such cases as criminal offenses because they involve intentional deceit.Failure to pay, on the other hand, occurs when you owe taxes but cannot pay the full amount owed by the due date. This may be due to a financial hardship or errors in your tax withholding. Honest mistakes or late payments generally lead to IRS penalties and late fees, not prison. While both tax evasion and failure to pay are very serious, tax evasion involves intentional wrongdoing and carries harsher consequences like criminal charges.That's why it's crucial to report all income accurately no matter how small and ask a qualified tax professional if you have questions. If you want to reduce your tax liability, there are many legal ways to do so, such as tax deductions and credits without falsifying documents and breaking the law.What could happen if you don't pay your taxesIt's not uncommon to face an unexpected tax bill that you can't afford to pay immediately. If you can't pay your taxes on time, the IRS doesn't immediately resort to extreme measures. Instead, the agency will begin sending notices that outline your balance and explain how it was calculated.Depending on what your letter entails, interest and penalties may also start accruing. If these notices are ignored, the IRS could then go after their money in other ways, such as garnishing your wages (deducting a portion of your paycheck), placing alien on your property or even seizing funds from your bank account.The IRS typically starts with audits, collection letters and then repayment options. However, if unpaid taxes are ignored for an extended period, they could lead to a tax evasion case and potential jail time. While prison sentences for unpaid taxes are rare, they are possible. If the IRS sends you a letter in the mail, I recommend responding promptly and reaching out to a tax professional if you have any questions. Pro Tip Watch out for tax scams. The IRS will never initiate contact via phone or email. If you receive a call or email claiming to be from the IRS, it's likely a scam. The IRS will always begin with mailed notices, which include instructions and contact information. What to do if you can't afford your tax billYour tax bill is due on April 15 this year, even if you file an extension. If you're unable to pay your full tax bill, don't panic. The IRS offers payment plans that you can set up onlineor with your tax preparer.If your bill is significantly larger and you can't afford to pay the full amount, you can also apply for anoffer in compromise. This agreement lets you settle your debt with the IRS for less than your tax bill.For example, if you're unable to pay a tax bill that's $60,000, you may be able to settle your debt for $10,000 under the OIC program. With this option, the IRS will consider your income, expenses and assets to confirm if you qualify for a lower repayment option. If you have questions about your tax liability, it's always best to schedule an appointment with a tax attorney or certified public accountant.Double check your tax return before you file itIt's not likely that you'll go to jail for making a late tax payment to the IRS, but it's important to make sure you're not underreporting your income and paying less than you owe. When you're filing your tax return, make sure you double-check the income you're reporting. You're responsible for any errors or omissions, even if they were accidental.If you have a tax bill, work with a tax professional to understand your repayment options to avoid other consequences. The IRS provides a directory of qualified tax professionals which can be very helpful when you don't know where to start. More tax advice
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