What happens if you don’t pay the income tax?

Question

I am 19 years old and I haven’t paid taxes yet because I don’t work. I was wondering what is the worst thing that can happen to a person who doesn’t pay taxes.

Answer 1

The worst thing that would probably happen to you would be penalties and fees for what you owed. The IRS will get their money eventually (through garnishment of wages or property seizure). Jail is unlikely unless you are famous or owe a REALLY large amount of money and they want to make an example of you. But having to pay more than twice what you originally owed is not unlikely if you do not file an income tax return and owe money.

The thing is, when you work at a job, and get paid as a W-2 employee. The employer will withhold taxes from every paycheck. So, at the end of the year, you might actually be owed a refund. In that case, you're not going to be in any trouble for not filing, but you'll be hurting yourself, because you will eventually loose the money that was otherwise due to you.

Answer 2

The worst that can happen is prison. It rarely comes down to that, however. The IRS has the power to pretty much take anything that you have -- wages, bank accounts, investments, home, cars, other assets, etc. -- to satisfy a tax debt.

If you have a tax debt that you cannot pay, they will normally give you a limited amount of time to work out a payment plan before they take anything by force. As long as you stick to the agreement and keep your payments on time they won't take any further action however they may still place liens on property to guarantee payment.

Just because you don't work doesn't necessarily mean that you don't pay taxes. Unearned income such as from bank accounts, investments, rents and royalties, etc. is also taxable income. The filing requirements for unearned income are generally much lower than for wages from a job.

Answer 3

Go ask Al Capone. He ended up in jail. Normally the worst that will happen is that you have to pay your taxes, and also interest and penalties. The irs can also garnish your paycheck to get unpaid taxes, and go after any assets that you might have to satisfy tax debts.

Answer 4

The worst thing...selling of your assets to pay the tax man and then to jail for tax evasion. The second worst thing...garnishment of your paycheck until the debt is paid.

Answer 5

They get richer? You can earn up to £5225 as income net of directly relevant expenses before you have to pay tax. Your real problem will be National Insurance contributions which you are also exempt from but which count towards your pension - you can pay voluntarily but you need to gamble on how likely it is you will live to need a pension, when future pensions will start to be paid from (already rising) and how generous they might be (a lot of talk on enforced savings schemes).
The site I give is quite good at explaining this last bit.

Answer 6

JAIL!