Getting a letter from the IRS can make your stomach drop. Even if you are on top of your taxes, seeing “Internal Revenue Service” on an envelope might make you shove it in a drawer and hope it goes away.
What happens if I ignore IRS tax notices? Unfortunately, they will not give up, and not responding could make things worse. Here are a few tips on what you should do.
Why the IRS Sends Notices
The IRS is not sending letters to ruin your day. They want to clarify information on your tax return, correct a mistake, or let you know you owe additional taxes, penalties, or interest. Some of the reasons you might get a notice include:
- They think the income you reported does not match what your employer or banks reported.
- You may have forgotten a tax form or submitted something with an error.
- They believe you underpaid your taxes.
- You did not file a return.
- There is a possible identity verification issue or suspected fraud.
Each notice usually includes instructions and deadlines. Remember that ignoring the problem will not make it go away. Many times, it speeds up the IRS’s response.
What Happens if You Ignore a Notice
Putting an IRS letter aside and pretending it does not exist might feel tempting, but here is what happens:
Penalties and Interest Start Adding Up
Taxes owed accrue interest from the original due date. That means late payment continues, and penalties pile on top. Even if you cannot pay the full amount, responding can help reduce additional charges.
More Notices
If you do not answer the first notice, expect follow-ups. These letters get more serious in tone. The IRS makes it clear that if you do not act, they may take additional steps.
Collection Actions
Ignoring repeated notices can trigger collections. These can include:
- Bank levies: Money taken directly from your account.
- Wage garnishments: Part of your paycheck withheld.
- Federal tax liens: Legal claims on your property, like your home or car.
Long-Term Consequences
The IRS cannot technically lock you up for unpaid taxes right away. However, ignoring notices can lead to bigger financial headaches. The longer the time passes, the more difficult it becomes to negotiate or minimize penalties.
Can It Ever Turn into Criminal Charges?
For most people, ignoring a notice can result in criminal charges. However, intentionally avoiding taxes, falsifying tax returns, or attempting to conceal income can result in a tax investigation or evasion charges. These are serious and carry fines or jail time.
Why You Need to Respond
Even if you cannot pay everything right away, responding to a notice shows the IRS you are trying to cooperate. In many cases, you can work out payment options. The IRS offers payment plans and, sometimes, “offers in compromise” where you settle for less than you owe.
Also, you can correct errors. If the notice is a mistake, such as a math error, you can correct it without penalties escalating.
Plus, you keep communication open. The IRS is more likely to work with you if you respond right away rather than ignoring them.
Tips for Handling IRS Notices
The first thing you want to do is read the notice carefully. Each letter comes with a unique number and specific instructions. You might miss important details if you skim through it.
Next, act quickly. Even a short delay can lead to additional penalties or interest. Responding right away shows the IRS that you’re taking the matter seriously.
It’s also important to verify that the notice is legitimate. Unfortunately, IRS scams are common, and scammers often try to make their letters look official. Double-check that the notice matches your tax records and contact the IRS directly if you are unsure.
Getting professional help can make a big difference, especially if the notice is complicated or involves a large sum. A Tennessee tax debt resolution lawyer can guide you through the process, negotiate on your behalf, or set up payment plans.
Get the Answers for Your Tax Issues
What happens if I ignore IRS tax notices? Nothing good. The letters will not just disappear. They escalate, penalties and interest grow, and eventually, you could face serious collection actions.
If you have received a notice, you need to take action. At Easter & DeVore, Attorneys at Law, we can help you take the necessary steps to resolve these tax issues. Schedule a consultation today.
