One of the biggest mistakes taxpayers make is failing to pay their back taxes. This is a common problem for many Americans, especially those who are self-employed or have multiple sources of income. When you owe back taxes, it can be tempting to ignore the problem and hope it goes away, but this is not a good strategy and will just make the situation worse.
In this blog post, we will discuss the consequences of avoiding paying back taxes and what you can do to resolve the issue.
Consequences of Avoiding Paying Back Taxes
There are several consequences of avoiding paying back taxes. The first and most obvious consequence is that you will incur interest and penalties on the amount you owe. The longer you wait to pay, the more interest and penalties you will accumulate, making it more difficult to pay off your debt.
In addition, the IRS can impose liens and levies on your property, including your wages, your home, car, and bank accounts. This can make getting credit, selling your property, or accessing your funds extremely difficult.
Another consequence of owing the IRS is that it may damage your credit score, making it harder to get approved for loans, credit cards, and other financial products.