Yes it can. There are many factors that can you leave you owing back taxes in your 50s or early 60s include divorce or early withdrawal of retirement funds/default on debts after a sickness or job loss.
Imagine a convenience store owner's surprise when he tried to access his bank account and found the Internal Revenue Service had seized his savings.
If you don't have the money to pay your taxes, it might cross your mind to try avoiding the problem by not filing at all. Unfortunately, this reasoning is badly flawed.
The pop-culture press loves to report on the foibles of celebrities - including their problems with tax debt. Among those struggling with it recently are apparently the actor Nicholas Cage and former football hero O.J. Simpson. They are not alone, of course. Many people have tax debt.
Taxpayers in Southern California can face substantial penalties when they do not meet deadlines imposed by the Internal Revenue Service. There is a penalty for failing to file a tax return in a timely manner, and there is a penalty for failing to pay the tax owed on time. The longer a taxpayer waits beyond the due date to file a return or pay tax, the more these penalties grow. If not dealt with, they can reach 25 percent of the unpaid taxes.
In our last post we discussed the basics of IRS liens, wage levies and bank levies. We also began to discuss a recent Tax Court case involving a construction company and the IRS. The company got behind on its taxes so the IRS imposed a lien and refused to subrogate it to a bank's claims arising out of a line of credit. Without the line of credit the construction company could not stay current on its tax obligation and risked closure, so the company took the IRS to court. The Tax Court sided with the construction company and held that the IRS abused its discretion in failing to subrogate its lien to the bank's claims.
It is not uncommon for an Orange County resident to be subjected to a tax lien or levy for unpaid taxes. A lien is type of security interest in property imposed due to a debt. A tax lien is often in the form of a wage or bank levy. A wage levy is essentially like having your wages garnished. When the IRS imposes a bank levy, it places a freeze on a taxpayer's bank account and reserves the right to use the bank account funds to pay a tax debt. Additionally the IRS may seize property or other assets that are equal in value to a tax debt.
The IRS has announced that it will help California taxpayers who are struggling financially with a series of new initiatives that may help Orange County residents get control of their tax liabilities.
The IRS has announced plans to try to help taxpayers who have tax liabilities that they are struggling to pay off. The goal is to try to help people and businesses to meet their tax obligations, paying back taxes due and avoiding liens.