No one wants to hand over his or her hard-earned cash to the government. Yet, in the United States, taxes are unavoidable. The constitution gives the government the authority to collect income from the citizens, who have a legal and moral obligation to pay. Falling behind on tax payments can have serious consequences.
The Importance of Paying Taxes
There are many different types of taxes. Federal, State, Local, and Social Security are just a few. The money goes towards maintaining civil operations and administering government agencies. It pays for socialized services such as welfare, pension funds, and health care. Other uses are:
- Infrastructure: roads, bridges, and dams.
- Security: military, police, and fire protection.
- Education: public schools
Penalties and Fines
Penalties and fines can be steep, depending on the reason that they were assessed. For back taxes and late filed returns, the amount could be five percent of the total owed. For more severe cases, such as when someone deliberately lies about income or falsifies a tax return, an additional penalty of seventy-five percent can be added. Blatant attempts to defraud the government can also be prosecuted as a felony. The punishment is a fine of up to $100,000 and five years in prison.
Other Serious Consequences
The government has the power to initiate collection proceedings against those to fall behind on tax payments. A lien or levy is sometimes used to secure a liability. A lien occurs against real property, such as a house or car. They are public record and can be damaging to personal credit scores.
A levy is used to seize any source of income a delinquent taxpayer may have. This includes wage garnishments, but any source of personal income can be levied. It makes an employer responsible for handing over a portion of the employee’s wage each period until the liability is taken care of. The federal government is not subject to the same limits of percentage as other agencies who may garnish wages.
Without tax revenue, there can be no roads, schools, or military. These services are all necessary for the survival of society. Every citizen shares the burden of paying the cost, yet some do fall behind. Regardless of the reason, the consequences of falling behind on tax payments can be serious. Worse yet, the government has the right to use almost any means to collect monies owed. The devastating effects of this can result in wage garnishments, property seizures, and even imprisonment.