Ignoring unfiled tax returns can have serious consequences beyond just penalties. The IRS has the authority to enforce collections in several ways that can directly impact your finances:
Bank Levies
The IRS can freeze your bank accounts and withdraw funds to satisfy unpaid taxes. This can happen even if you were unaware of your outstanding balance.
Wage Garnishments
Up to 15% of your paycheck may be taken directly from your employer until your tax debt is satisfied. This can create financial hardship for you and your family.
Offset of Refunds
If you file late but are owed a refund for a more recent year, the IRS may apply that refund to your older debts, delaying or reducing the money you receive.
Substitute Returns
In cases where taxpayers fail to file, the IRS may prepare a return for you — often without deductions or credits you’re eligible for, resulting in a higher tax bill.
Proactive Filing is Key
Filing your returns voluntarily, even if you can’t pay in full, gives you more options. You may qualify for payment plans, penalty relief, or other IRS programs that protect your finances.
At Tax Rescue CPA, we help clients understand these risks and create a strategy to file missing returns, protect wages and bank accounts, and negotiate with the IRS when necessary. Don’t let unfiled taxes put your finances at risk. Contact Tax Rescue CPA today to get started.
