When facing financial uncertainty, it is not unusual for Georgia residents and those elsewhere to think about ways that they could lessen their burdens. Some people may think that they could avoid certain monetary obligations if they simply put them on hold until they become more financially stable, but that does not always work as hoped. In particular, if you or anyone else is thinking about not filing your taxes in order to avoid additional money issues, you may want to think twice.
Taxes can become a serious burden for many people, but not filing may not bring the relief that they hope. In fact, not filing your taxes does not simply mean the IRS does not know about what you owe. The agency likely already has information provided from your employer.
What happens if you do not file?
If you owe taxes to the government and do not file your return, you could face a number of issues. These could include penalties for not filing or for filing late, interest on the amount that you already owe and possible attempts by the IRS to collect on your tax debt. If you know that you cannot file your taxes on time but intend to file soon after the deadline, you may be able to apply for an extension and avoid penalties for filing late.
However, if you do not file by the original deadline or by your extension date should you receive one, you could face penalties, which typically include an additional 5% of your tax liability for each month that you do not file. For the second month, you would face a penalty of an additional 5% and $210 or 100% of your tax liability. For the latter, the lower amount of the two applies.
What happens as time goes by?
You may think that, even if penalties apply for not filing, it will not matter because you do not intend to file anytime soon. Still, it is important to keep in mind that the penalties will continue to accrue — increasing your tax obligation — and the IRS may begin to garnish your wages, put a lien or levy on your property, or take other actions in attempt to collect your debt.
Unfortunately, this situation could turn into a serious matter that could leave you facing an even worse financial ordeal than you started with. As a result, if you believe you will have tax debt you cannot address at the time of filing, you may want to gain information on other ways to handle the issue. The IRS offers various payment plans and options for which you could apply in hopes of finding a way to effectively pay your obligations.