Audits only apply to a filed return. Sign on the dotted line and they can audit that return almost in perpetuity. However, when a return is not filed there is another process that takes over. I know because I was involved in a tax revolt back in the seventies. It did not go well for most involved. I was one of the few lucky ones.
It was fairly easy back in the seventies to claim on a W-4 enough exemptions to not have any federal withholding. The employer had to honor it. Now it is different - the IRS clamped down. After not filing a return you will get the usual letters from the IRS, some time later, that you have not filed your return and will be assessed a fine for late file, the interest, blah blah. There is not a whole lot of contact with them for several years. It is easy to think that nothing is happening - but it is.
The statute of limitations on a no-file return is 3 years. At almost the 3 year point the IRS assesses what taxes they think you owe based on the information they have. After they assess the return and determine the money they think you owe they then start the process of collections. In the seventies and eighties there was a 6 year statute of limitations on collections of assessed monies owed. After the 6 years, the collections have to stop unless you have agreed to some payment plan with the IRS which at that point you will pay till they get their money even after you die. On a joint return, they can come after both spouses. Because of previous tax revolts, the IRS has extended that time to 10 years on collections. That is a long time to run from the IRS.
Once an assessed amount is levied by the IRS, including fines and interest, the amount owed can balloon to thousands. I figured I owed originally about $600. By the time the IRS started collections the bill had blown up to $28K in just 3 years. The IRS will not arrest you, but they can sure make your life miserable. They can garnish your wages, clean out your bank account, ruin your credit, and other things. In addition, a bankruptcy will not clear an IRS debt. I was lucky because I was in college at the time and was able to ride out the statute. The sad part were the others I knew that also decided to revolt and the heavy hand of the IRS reached deep into their pockets. So, it may sound like a good thing to do, but think carefully and understand how the process works before taking the leap. Make sure there is water in the pool before you jump. Until the IRS itself is either abolished or revamped, not paying taxes may not be a prudent move.
" The IRS will not arrest you, but they can sure make your life miserable. They can garnish your wages, clean out your bank account, ruin your credit,"
100% correct. You're not going to get arrested, but they will make damn sure your financial life is totally ruined. They can do that in mass because it's automated. They will wait until just before the 3-year statute runs out, then nail you, that's done on purpose.
The IRS needs to be abolished because it's illegal, and I think it will be, but everything takes time.
I was wondering if filing for an extension would work, .... that gives you until October to pay.... if everyone did that could they be protected and perhaps hurry the abolishment part of the corrupt irs?
Nope. Filing an extension only delays payment on a filed return. You are still agreeing that the money is owed. Unless the IRS is abolished they will get you one way or the other.
Audits only apply to a filed return. Sign on the dotted line and they can audit that return almost in perpetuity. However, when a return is not filed there is another process that takes over. I know because I was involved in a tax revolt back in the seventies. It did not go well for most involved. I was one of the few lucky ones.
It was fairly easy back in the seventies to claim on a W-4 enough exemptions to not have any federal withholding. The employer had to honor it. Now it is different - the IRS clamped down. After not filing a return you will get the usual letters from the IRS, some time later, that you have not filed your return and will be assessed a fine for late file, the interest, blah blah. There is not a whole lot of contact with them for several years. It is easy to think that nothing is happening - but it is.
The statute of limitations on a no-file return is 3 years. At almost the 3 year point the IRS assesses what taxes they think you owe based on the information they have. After they assess the return and determine the money they think you owe they then start the process of collections. In the seventies and eighties there was a 6 year statute of limitations on collections of assessed monies owed. After the 6 years, the collections have to stop unless you have agreed to some payment plan with the IRS which at that point you will pay till they get their money even after you die. On a joint return, they can come after both spouses. Because of previous tax revolts, the IRS has extended that time to 10 years on collections. That is a long time to run from the IRS.
Once an assessed amount is levied by the IRS, including fines and interest, the amount owed can balloon to thousands. I figured I owed originally about $600. By the time the IRS started collections the bill had blown up to $28K in just 3 years. The IRS will not arrest you, but they can sure make your life miserable. They can garnish your wages, clean out your bank account, ruin your credit, and other things. In addition, a bankruptcy will not clear an IRS debt. I was lucky because I was in college at the time and was able to ride out the statute. The sad part were the others I knew that also decided to revolt and the heavy hand of the IRS reached deep into their pockets. So, it may sound like a good thing to do, but think carefully and understand how the process works before taking the leap. Make sure there is water in the pool before you jump. Until the IRS itself is either abolished or revamped, not paying taxes may not be a prudent move.
" The IRS will not arrest you, but they can sure make your life miserable. They can garnish your wages, clean out your bank account, ruin your credit,"
Or nothing. You got me right there.
Upvoted for wealth of good info
Time to abolish the IRS then.
I was wondering if filing for an extension would work, .... that gives you until October to pay.... if everyone did that could they be protected and perhaps hurry the abolishment part of the corrupt irs?
Extension gives you until Oct to file, but you still have to pay by Apr 15.
Or incur late payment interest.
Oooo thank you for that info :)
Nope. Filing an extension only delays payment on a filed return. You are still agreeing that the money is owed. Unless the IRS is abolished they will get you one way or the other.
That sucks.... abolishing it is the only way