Does Anyone Have Experiences With Not Paying Their Taxes?

[sirhandsome]

Has anyone had any actual experiences or at least observed what happens to people like me who are kinda ignoring the IRS?

I'm just a "thousandaire" affiliate marketer, and I find that I don't make enough money to pay my bills, have a little fun, AND pay my taxes, which I estimate to be $X,XXX.

I was not able to pay my 2009 taxes, and now I find myself in an even worse situation in 2010, oweing more yet having pretty much the same amount of money: just over $2,000 in my bank every month after the bills are paid.

I find myself in an uncomfortable income bracket where I make enough to have real tax liability, but not enough to spend the bulk of my income on business expenses, hire tax professionals, or to just "deal with it and pay my taxes." I simply can't afford it

Obviously getting my ass in gear and making more money so I don't have to make choices like this would be the ideal situation. But I also feel it's a bit late for that.

So I'm wondering what kind of risk I'm taking by just kinda ignoring this situation. I plan to work harder this year and finally increase my income and then maybe I'll be able to pay my back taxes if they come after me

Do I have time for this? Is it not worth putting off? I suppose I *could* pay a portion of my back taxes if its serious enough, but it would involve getting into credit card debt and possibly getting some crappy temp job or something. Worth it? Or is the IRS more bark than bite? Honestly the thought of forking over so much of my hard earned dough when I don't even always feel like I have enough for myself pains me to no end

I look forward to your responses, advice, and wisdom.

 

[iseegreen]

no offence

but if there's one person you need to pay in your life its the IRS.

they assess back taxes and penalties - that simply make it not worth the trouble to not pay them. In addition if you make it worth enough they will just sell your assets until they have their money.


Number 1 go to an accountant tomorrow - figure out how much you owe - and send in a payment agreement as some number you can afford each month - whether its $100 or whatever - but get started tomorrow.

Right now they are working with taxpayers because of the economy - but in the future they may not do this ---- so anyway thats my advice - goodluck !

 

[Autumn]

Above poster is correct... The tax dept in most countries is serious business and the US IRS is the most serious of all. You really don't want to fuck around with those people.

Have fun getting raped in prison!

 

[cjw10]

A good accountant will pay for itself in finding tax deductibles

 

[Randy569]

Trust me on this one, I been where you are.

DO NOT F*CK WITH THE IRS!

They will make your entire existence a living hell. They don't care if you are barely paying your bills, or even have food in your house.

I screwed up several years ago, and thought I could just ignore them, and they would go away.

WRONG!

Get a tax attorney and a accountant ASAP, and contact the IRS immediately. If you call them, and offer to work out some type of payment schedule, they will generally work with you, and make it somewhat less painful. (Notice I did NOT say pain-free.)

If they have to come find you, they are not pleasant.

Get on top of this immediately, the sooner, the better.

 

[wrangler]

What they all said. Seriously. Call them today, work it out. Today.

 

[bigtay]

If you only made thousands of dollars, you should be able to easily write off enough stuff to where you don't have to pay anything.

 

[Laser]

wow.

If they suspect fraud they have been known to go back and audit 10+ years of your financial life.
Eventually they will send you a letter,,, ignore it,,, and they will eventually drop by and seize everything you own.
File bogus information on your tax return and they will put you in prison.

Welcome to the grown-up world.

The IRS is a monster you do not want to f*ck with.
The IRS have brought down the mafia, politicians, bankers, and financial masterminds,,,

pay the taxes or your life can get really ugly.

 

[wainage]

Phone the IRS and work out a payment plan immediately!

No one wants to pay tax but unfortunately the IRS has endless resources and the means to hunt you indefinitely. Oh and once they audit you ... they come back every year until you produce a clean return. You would rather owe the mod money than mess with those fools.

Don't screw around. The longer you let this go on, the steeper the penalties and interest will be.

You should allocate 20% of all your earnings to a "tax savings" account. NEVER mess with this account even if you have to eat ramen noodles for 2 years.

 

[shadowedsniper]

I had a family friend who used to be an auditing consultant working with the IRS - particularly analyzing people with W2-Gs (gambling income) - before he retired and we had this conversation a couple years ago.

He basically told me that as long as you file, and are not claiming deductions that have certain flags (like the new homeowners credit), your chance of being audited is incredibly slim. He said that the people they like to nail are making $1m+ and paying next to nothing or even making money on their tax returns.

That's the advice I've been following these past couple years but it seems like everyone else posting here has horror stories so take this with a grain of salt.

 

[Autumn]

That's the advice I've been following these past couple years but it seems like everyone else posting here has horror stories so take this with a grain of salt.

That sounds reasonable and most of the tax people I've talked to agree that as long as you're paying something and flying below the radar, you'll be OK.

However, the OP hasn't been paying anything at all. Hence...

http://www.youtube.com/watch?v=ItAzJD0o9NQ

 

[thevil]

I know several people who got royally fucked by the IRS. They do not fuck around once they have their sights on you, but chances of getting caught are less if you don't own cars or properties in your own name, have large accounts payable, filled out any IRS forms (especially form 8300), receive a good amount of money through affiliates that have your SSN (remember, affiliate companies do report taxes)).

You should ATLEAST File taxes. Most of the problems arise when someone doesnt even file anything. Filing accurately is another matter, but alot of stuff can be written off.

The people I'm talking about don't even own cars in their names any more.

 

[dillfly2000]

That sounds reasonable and most of the tax people I've talked to agree that as long as you're paying something and flying below the radar, you'll be OK.

However, the OP hasn't been paying anything at all. Hence...

http://www.youtube.com/watch?v=ItAzJD0o9NQ

That's where that from, Here I was thinking that Chris Rock came up with that all on his own.

 

[sirhandsome]

Thanks for the responses.

From the tone of the replies, I guess I have no choice but to file on time and set up a payment plan.

That's what I was leaning towards eventually doing anyway, but as the procrastination was happening, I always kept thinking "well soon I'll be making more money anyway and I'l be able to pay all the penalties etc."

Distractions of life came up, and that hasn't happened yet, and now I'm where I am today.

I don't own any real assets, but I plan to someday, and definitely don't want to be on their list.

My original post and question may seem silly because it is so contrary to conventional wisdom, but it's just that with all the bullshit I was taught growing up, things I assumed were true and found out weren't, etc. I wanted to check with people who I know will give it to me straight about what the reality of the situation is in real-world terms, rather than just assuming everything I've heard is true. That mixed with not many experiences of my own to draw from, I've sort of learned to question everything. Even the IRS.

But you guys, I believe, so thank you very much for taking the time to share. I mean that. My path seems clearer now

 

[robertodelgato]

You should file your 2009 and 2010 tax returns ASAP.

The penalty for not filing is huge. The penalty for not paying is actually much less.

File, then start the process to set up a payment plan to resolve the back taxes.

Frankly, if you're a 'thousandaire' IMer, you can probably find enough deductions to offset the little income you're making. Hell, if GM can make $15 BILLION and not pay any taxes you should be able to find a few offsets!!

Your computer, software, office, internet bill, etc. are all deductible...

IF you do it right.

Go to

www.nolo.com

and look up their section on business incorporation and taxes.

PS. Anyone tells you not to pay your taxes because it's 'illegal', 'not in the constitution' or 'Congress can't make you' is completely nuts. You better believe THEY are paying their taxes or they'd be in jail.

 

[Cnotey]

LOL. I find it funny how scared some people are of the IRS.

I went 4 years without filing my taxes. I skipped 2005, 06, 07, and 08. I decided to file in 09. When I filed my 09, and was due a return, the only thing that happened was I had to file my 05-08 taxes.

Of course they jacked most of my 09 return for penalties and taxes, but I didn't go to prison, I didn't get fined, shit they didn't even garnish my day job.

Regardless of what people may think, the IRS is really easy to work with.

Honestly though, if you owe from last year, and it looks like you are going to owe this year, file an extension and then set up a payment plan for what you already owe.

Because if you owe for last year and this year, then they won't set up a payment plan.

I am in the exact same boat you are right now, owing both last year and this year, and what I described above is exactly what I am doing.

 

[efwebs]

I lost sympathy after "have a little fun".

The IRS gets records from like places ad networks, which is why they all ask for your SS number when you sign up. Other places like paypal dont report anything as far as I know.

When I was younger I knew I didn't have to claim some sources of income if they were low enough. I don't know if that means you don't have to claim sources that are under $600 each, or if you don't have to claim if it's $600 total between all sources. So, there might be some loopholes if you are receiving small checks from several places.

That's just what the IRS knows about. They could also come and ask how you pay your bills if you don't report the stuff they don't know about.

Go to the library and get a tax book for small businesses. It should tell you enough. But sweeping it under the rug will only get you in trouble.

 

[sirhandsome]

Honestly though, if you owe from last year, and it looks like you are going to owe this year, file an extension and then set up a payment plan for what you already owe.

Because if you owe for last year and this year, then they won't set up a payment plan.

I am in the exact same boat you are right now, owing both last year and this year, and what I described above is exactly what I am doing.

Thanks, thats good advice. I wasn't aware that they wouldn't set up a payment plan if I owe for last year and this year (i do)

 

[tjs54]

Here's my sitiuation right now, first thing always file because if you don't it's tax evasion, federal time!

My wife is drawing a small pension, I lost my job in 09, we owe the IRS about 20 grand right now from 09, (she took an early withdrawal from a 401K to pay medical bills) thus the taxes and penalties. We have a house with a mortgage and no equity and a car, that's it other than personal belongings. After we pay all our bills at the first of the month we have a little bit left to split between medical bills and groceries.

After looking at our situation the IRS put us in a "Non Collectable" status, meaning we owe it and will have to pay if we ever came into some money but they won't throw us out into the street and take our home or "hound us". We have nothing they could take. Last year we had a refund coming which they kept and applied to the debt.

Our debt is through the roof because we used credit cards to pay medical bills so we are filing bankruptcy but the IRS debt can't be discharged. We will be able to get out from under the main load but we are "status Quo" with the feds.

So the bottom line is, not having the money to pay is not a crime, but not filing is. Good luck with your situation.

 

[Cnotey]

Thanks, thats good advice. I wasn't aware that they wouldn't set up a payment plan if I owe for last year and this year (i do)

NP man, I actually just filed my extension 5 minutes ago. Took about 60 seconds on Turbotax.com.