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What could happen if you do not pay your tax balance?

On Behalf of | Mar 12, 2021 | IRS Issues

Having debt relating to owing taxes is not always an easy matter to handle for any Georgia resident. You may have had every intention of paying your taxes when the time came, but personal extenuating circumstances may have prevented you from doing so. Now, you likely have a constant reel of worrying thoughts running through your head about what might happen. 

Those thoughts likely go to worst-case scenarios. You may think that the IRS will seize your house, garnish your wages, or put liens or levies on your property. You could also have spiraling thoughts that you will end up in jail because of your lack of payment. While these feelings and concerns are understandable, you may want to keep in mind that these possibilities are not ones that happen immediately. 

What happens if you do not pay? 

If you are unable to pay your taxes and accrue a debt with the IRS, you will face some immediate action from the agency. Those actions include the following: 

  • The IRS will send you notices to make you aware of your outstanding balance. If you do not pay your balance after receiving these notices, the agency will take additional steps. 
  • The IRS will place your account into the automated collection system, and you will receive notices explaining that your account is in collections and the consequences you could face if you do not pay by a certain deadline. 
  • Interest will begin to accrue on your unpaid balance and the IRS will apply failure to pay penalties, making your financial obligation even more. 
  • The IRS could decide to file a tax lien against your property. 
  • The IRS could place levies on your wages, small business accounts or bank accounts. 
  • A revenue officer may come to see you in person, but this typically only happens when you owe substantial amounts, have not filed taxes in multiple years or you owe for multiple years in a row. 

So, while some of your fears about what will happen to your financial affairs if you do not pay your outstanding balance are valid, you may want to understand that you can see tax relief before your situation reaches a dire point. You may be able to qualify for currently not collectible status, an offer in compromise, an IRS-approved payment plan or other options to help you address your liability before facing liens or levies.