Generally, the answer is yes but it’s not something the IRS does very often or even wants to do. They’d much rather have the taxpayer enter into an installment agreement or borrow against the assets and pay their taxes. But as I said, if the taxpayer ignores the IRS and makes no attempt to pay the taxes then the IRS can issue levies and seize various kinds of assets and sell them at auction.
If I Owe The IRS, How Much Interest Will I Have To Pay?
That is a question I cannot answer directly because the IRS adjusts their interest rates every 3 months. Right now, it’s generally running between 4% and 5%. However, that is not the important thing because that is not simple interest. The IRS interest is compounded daily so the effective interest rate is much higher than the published rate.
Will I Go To Jail For Not Paying My Taxes?
You can but not for just not paying taxes. If you fall behind on your taxes or do not file returns that in and of itself is not criminal. To get into the criminal area, you must have committed fraud or not filed your taxes on purpose trying to evade taxes. That’s the difference.
Why Was I Chosen For An Audit?
There are several reasons that you can be chosen for an audit. One is it can be completely random. The IRS computer puts out names every once in a while that have no particular reason. However, more audits are done for Schedule C income taxes than anything else. The Schedule C is for unincorporated businesses, sole proprietorships to report their income that way. Also, if you have a large increase in giving for charity one year or have a large increase in medical bills, this can also generate an audit.
When Can The IRS Audit Me?
The IRS can pick a tax return to audit any time after its filed for up to 3 years. The only way the IRS can audit a tax return that’s more than 3 years old is if they have reason to believe there was fraud involved in filing that tax return.
Will I Be Subject To Future Audits Because I Challenged The IRS?
Absolutely not. The systems are completely different in their computers and so just the fact that you challenged the IRS and you may be won or you may be lost your challenge will have nothing to do with you being audited in the future.
What If I Need More Time To Respond To The IRS?
Generally, this is not a problem. The IRS is very lenient in giving you extra time, if you contact them within the time that they ask which is usually 30 days. One exception is that when you get a final audit notice and you are notified in the letter that you have 90 days to file a protest in the tax court, that time cannot be extended. But any time you are dealing with a revenue officer and they ask for something within 30 days or 21 days, if you call them ahead, they would generally give you an extra 30 to 60 days to respond.
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