If you return your tax form on time and pay your taxes when they are due, then there is generally no reason you have to worry about the IRS. However, if you miss either of these then you will be reminded, politely, initially of your oversight. This will give you an opportunity to rectify your mistake and breathe easy again.
If you do not submit your tax return on time, and do not pay the taxes due then initially you will have a short respite. You can ask for an extension and that will give you more time to get your affairs in order, but you will still need to pay your taxes. If you continue to disregard notices from the IRS and fail to pay your taxes, then the IRS has systems in place where they can instigate formal measures for retrieval of the debt.
These can include adding a late penalty fine to your tax debt. Adding interest to the unpaid tax debt, which can seriously add up! More serious measures would include garnishment of your wage, a tax lien against your property and bank levy, thus restricting your finances. Finally, it is within their power to instigate legal proceedings, which in very serious cases or cases of fraud, may result in imprisonment.
Tax Defense Partners can help you sort out your finances so that you can come up with a realistic repayment installment plan that suits your needs and satisfies the IRS. There are a few things to remember:
If you miss one payment, for whatever reason. The IRS are generally forgiving of this and will continue with the installment agreement. They only rarely default an installment plan after one missed payment.
If you have a direct debit setup, the IRS will continue to debit it automatically, even if this defaults your payments to other creditors. If you have an issue with affording the repayment, you should contact the IRS as soon as possible.
If you can no longer afford to keep up with the repayments, no matter what the reason, you should contact the IRS immediately, rather than allow the installment plan to go into default. There are other options available and Tax Defense Partners can talk you through them.