Leonardo Angiulo: How To Survive Tax Day (and Stay Out of Jail)
Monday, April 15, 2013
It's fair to say that most people don't participate in this process just out of tradition or a sense of national obligation. The practical reality is that when you have a tax deficiency due and willfully attempt to evade making your payment you are committing a felony. Tax evasion is a violation of the statute found at 26 USC 2701 and the United States Attorney's office is responsible for prosecuting such actions. The idea of being the target of a federal investigation and a criminal case is not a pleasant one. It's likely that no matter how much you owe in taxes it's still less than the combination of legal fees and penalties after trial if you lose. Not to mention the risk of incarceration.
What if you just don't have the money?
Of course some people that owe money to the Internal Revenue Service aren't trying to avoid their obligations. Sometimes they just don't have the money. Or maybe they face challenges in their lives that prevent them from focusing on their taxes. There are various professionals that can help you through the process of explaining why you haven't paid. Maybe you need more time, or perhaps you dispute the amount owed. Whatever the reason, you better speak up or hire someone to speak for you. If you aren't certain why you should, remember that the IRS has a series of procedures they can use to get at what they say you owe them.
First, a lien may be filed against you and your property. A lien, in this case a federal tax lien, is a way for the whole world to know you owe the IRS money. Typically, this lien will appear at places like the registry of deeds. If you sell your real estate this notice will ensure any profits from that sale will be applied to your debt.
It can go from bad to worse...
In a more aggressive move, the feds may institute a seizure of your property to satisfy your debt. This is called a levy and can mean the forfeiture of vehicles, real estate, portions of your income as well as bank accounts. There are important exceptions to the levy power of the IRS that a trained professional can instruct you on. Some examples, however, include monies applicable to court ordered child support and certain amounts of tools and books for your business.
Just because the IRS has broad powers does not mean that we, as taxpayers, are without an ability to challenge their findings. The trick is that you must follow appropriate protocols for asserting your rights. First, you have to file a return. Then you have to pay. Or, in the alternative, you must file an appeal of any claim for amounts owed.
As mentioned previously, if you are facing tax issues there are experts out there that can help explain how the law applies to the facts of your case. Typically these experts spend years getting education on taxes and how to do them correctly. I think all those experts and regular folk would agree that you really can't ignore your taxes. You don't need a degree to know that.
Leonardo Angiulo is an Attorney with the firm of Glickman, Sugarman, Kneeland & Gribouski in Worcester handling legal matters across the Commonwealth. He can be reached by email at [email protected] or through the firm's website at www.gskandglaw.com.
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