The IRS, or Internal Revenue Service, is the U.S. government agency responsible for tax collection and tax law enforcement. Many people dread tax season and may try to avoid paying taxes altogether. However, not paying taxes can result in serious legal consequences. So do you legally have to pay the IRS? The short answer is yes.
Do I have to file taxes?
In most cases, if you earn income in the United States, you are legally required to file a tax return. There are a few exceptions, such as if you:
– Are claimed as a dependent on someone else’s tax return
– Are married and file jointly with a spouse who earned all the income
– Are a non-resident alien with no U.S. income
– Earn less than the standard deduction for your filing status
But in general, if you work or earn money in the U.S., you must file a tax return reporting that income. The only way to legally avoid filing is to have no taxable income at all.
What happens if I don’t file my taxes?
Simply not filing your taxes does not make your tax obligation go away. The IRS expects you to report your income and file a return every year. If you fail to file, you can expect penalties like:
– 5% per month of unpaid taxes, up to 25%
– $435 fine for filing late (increases based on how late you file)
– Loss of certain credits and deductions
You may also be charged interest on any taxes owed. The penalties and interest can quickly multiply the amount you actually owe.
Can I go to jail for not paying taxes?
Failing to pay your taxes is against the law. But the IRS will typically not pursue criminal charges for someone who files their return but cannot afford to pay. However, more serious tax evasion can result in criminal prosecution.
Some examples of criminal tax offenses include:
– Tax evasion: Willfully attempting to evade assessing, paying or collecting taxes. This may include filing a fraudulent return.
– Tax fraud: Knowingly falsifying information on your tax return through deceit or deception. Lying about income, expenses, deductions, credits, etc.
– Not filing: Willfully neglecting to file a required tax return.
These types of tax crimes can be charged as misdemeanors or felonies and may result in fines or jail time. The IRS Criminal Investigation Division handles suspected criminal violations of tax law.
What can the IRS do if I don’t pay?
The IRS has considerable power to collect unpaid taxes. Some actions they may take include:
– Issuing a tax lien: A legal claim on your property, including real estate, vehicles and other high-value possessions. This gives them the right to seize property if the debt remains unpaid.
– Levy your bank account: The IRS can legally seize funds from your bank, investment or retirement accounts.
– Garnish your wages: They can contact your employer to have a portion of your paycheck withheld and sent directly to the IRS. This is continuous until the debt is paid.
– Seize and sell your property: For serious tax debts, the IRS can seize your property, home, car or other assets and sell them to pay your tax liability.
– Revoke your passport: The State Department can revoke or deny new passport applications for taxpayers with seriously delinquent tax debt.
Criminal charges are rare, but the financial consequences of unpaid taxes can be severe. Some options like setting up a payment plan may be available if you cannot pay in full. But avoiding the IRS entirely is not legal and can create exponentially worse problems.
When do I need to pay the IRS?
Taxes are due every year by April 15th for most taxpayers. This is the deadline to file your return and pay any taxes owed. You can request an automatic six month extension to file until October 15, but any estimated taxes owed are still due by April 15.
Other payment deadlines include:
| Payment Type | Due Date |
|---|---|
| Income taxes for the current year | April 15 |
| Estimated quarterly taxes for self-employed | Quarterly: April 15, June 15, September 15, January 15 |
| Quarterly payroll taxes | Quarterly: April 30, July 31, October 31, January 31 |
If you owe other taxes like gift tax or estate tax, those are due on the 15th day of the month following the relevant event or transaction. The key is you must pay taxes when they are due to avoid penalties and interest. The April 15 deadline is an annual requirement for all taxpayers.
What if I really can’t afford to pay?
The IRS understands that some taxpayers may struggle to pay what they owe. If you anticipate having difficulty, take proactive steps like:
– Request an extension: File IRS Form 4868 by April 15 to get an additional 6 months (until October 15) to file your return. Note this is only an extension to file, not pay. You need to estimate and pay any owed taxes by April 15.
– Set up a payment plan: The IRS offers payment plans that allow you to make monthly payments over several years for any taxes owed. You may qualify for a short-term plan (180 days or less) or long-term installment agreement stretching across multiple years, depending on the amount owed. This avoids further penalties and collection actions as long as you stick to the terms.
– Request an Offer in Compromise: This allows you to settle your tax debt for less than the full amount in certain circumstances. You must prove you don’t have the means to fully pay the liability based on your income, assets and expenses. Generally, you can pay off the negotiated amount over several months or years.
– File for bankruptcy: As a last resort, declaring bankruptcy may discharge certain tax debts, but not all of them. You must prove the taxes are at least 3 years old and you lack the means to pay them.
If you receive an IRS notice about unpaid taxes, don’t ignore it. Call the IRS or speak to a tax professional about your options. Failing to address it will only make the situation worse.
How can I avoid problems with the IRS?
The easiest way to avoid problems with the IRS is to file and pay your taxes properly each year. It also helps to:
– Keep detailed, organized tax records so you accurately report income, deductions and credits.
– Review returns carefully before filing to catch any errors.
– File on time or request an extension if more time is needed.
– Pay as much as you can by the deadline, even if you cannot pay in full.
– Have any refund you are owed directly deposited so you get it quickly.
– Contact the IRS promptly if you receive a notice about taxes owed. Don’t avoid the issue.
– Pay estimated taxes during the year if you are self-employed or have other substantial income not subject to withholding.
– Hire a tax professional if you have a complicated tax situation or are unsure how to accurately file.
Handle your taxes responsibly and you are much less likely to encounter issues with the IRS. If problems do arise, there are options available to help resolve the situation. But ignoring your legal obligation to pay taxes is never the right answer.
Conclusion
Paying taxes is not optional—it is the law. While most Americans don’t particularly enjoy paying taxes, failing to do so can open the door to expensive IRS penalties, aggressive collection actions, and even potential criminal prosecution in extreme cases. Your best path is to file honest, accurate returns and pay what you owe on time. Work with the IRS to request payment plans or settlements if you cannot fully pay on April 15. Whatever you do, don’t try to avoid the IRS altogether—it will eventually catch up with you and make your situation much worse. Handled responsibly, paying taxes is just something all law-abiding citizens need to do.
