Here's what the IRS does when individuals fail to file and pay their taxes...
150 million individual income tax returns were filed in 2021. About 7 million taxpayers do not file each year, and there are various reasons for this. Sometimes, they can't pay what they owe and they avoid filing. However, this will only increase the amount of taxed owed.
The IRS will charge a 5% penalty per month on the amount due, and this will increase month by month until it caps at 25%. So, $10,000 can quickly jump to $12.5k.
Oh, and that's not all. That does not include failure to pay penalties and interest. Things can get messy, real quick!
Absolutely! If you can't pay the current tax liability, an Installment Agreement or Offer in Compromise can make it possible for you to pay your taxes and still meet your monthly bills.