Do you owe back taxes? If so, realize that you’re not alone. Even the world’s richest and most popular people owe back taxes, too. And the IRS will get their money, regardless of who you are. Just ask Jennifer Lopez.
Here’s what El Pais, the most widely newspaper in Spain, had to say in 2007 about singer Marc Anthony, husband of singer/actress Jennifer Lopez:
“At least three companies he owns have not paid their taxes correctly and have been told to pay $2.5 million to the state and city of New York. They will also have to pay an additional $180,000 in fines.”
“So much for anyone being “above the law”. The IRS usually always gets their man, eventually (even if he spends a lot of time walking down the red carpet…).
What are back taxes? And why should you worry about them? Back taxes are simply taxes you owe that were not paid when they were due.
If you’ve underpaid taxes for any reason, the balance that you owe is considered back tax. You may have failed to report taxable income (intentionally or unintentionally, it doesn’t matter) – as the IRS sees it…you still owe them money in the form of a back tax.
Some people don’t have the money when the tax bill comes around, so they just don’t pay. They may plan on paying the money when they’re able…but that time never seems to come around.
If nothing seems to happen or they don’t get ‘caught’, some people start believing that they’ve somehow slipped under the radar of the IRS and that they’re getting away with it. They’re not. In fact it might take years for the IRS to come after you.
How do you know your back tax problem is getting serious? Here’s how it happens:
-You’ll get sent a Notice and Demand for Payment from the IRS.
-You either pay or don’t pay the tax.
-If you don’t pay, you’ll be sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy.
That’s when you know you’ve got big problems. That means in 30 days, the IRS is going to start helping themselves to the money in your bank account. If you’ve received a Final Notice of Intent to Levy, you need to take action immediately.
Even if you haven’t been notified yet … you will be. If you owe back taxes, even if you haven’t received your first Notice and Demand for Payment from the IRS, eventually you will. And the worst part is that there are interest and penalties that are adding up everyday that you don’t pay. Ignoring the problem makes it worse…by the day.