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Why do people pay taxes that put them in real risk? Isn't the point of taxes to contribute financially to the continuance of the place that is doing something f

Why do people pay taxes that put them in real risk? Isn't the point of taxes to contribute financially to the continuance of the place that is doing something for you? I currently owe like 5 years worth of taxes, but paying it would compromise my well-being, so they can wait. Seems perfectly rational. If you have 50000 to pay in taxes, but only 10000 in savings and $3k a month in expenses, or even $50k in savings, only a small amount should be legally required from you. Maybe the U.S is different. Not to say I'm not working on it though, but if paying taxes would put me on the street, guess what, I'm not paying them until whatever they pay for lets me live a life. Just like any other debt, if I'm put in a vulnerable position, debts don't get paid unless they someone else owns the thing I'm living in or depend on, or they can break my legs, like the bank. One could argue you shouldn't have made that particular risky financial move, or you shouldn't be taxed on reception of illiquid assets, which would also both be valid.

noodlesUK 5y ago
I have no idea where you're writing this from, but in almost any western country that I have any knowledge about what you're describing is wilfully committing a crime.
- ShivShankaran 5y ago
  It's a crime only in US. Most civilized countries allows people to stagger their taxes.
- jonas21 5y ago
  In the US, it's not a crime as long as you file your taxes accurately. The IRS generally allows you to set up a payment plan or even settle for less than is owed if it would cause hardship to pay.
  - toss1 5y ago
    Right, but you DO need to file the tax returns with the IRS, accurately reporting your income, and then actually negotiate the payment plan (and stick to it or renegotiate). We don't just get to unilaterally declare that 'I'll be uncomfortable paying taxes, so it can wait'... and then not bother to file or negotiate a plan, which seems to sum up OP's position. Wish him/her luck, they'll need it!
- dragonwriter 5y ago
  Concealing income is a crime, delaying payment is not (though you will pay penalties and interest). It's quite easy to get a payment plan where you do this and don't risk garnishment or other collection efforts as long as you follow it.
- exolymph 5y ago
  Who cares if it's not enforced? Granted, IRS does enforce, but apparently they take their time about it.
- toyg 5y ago
  As others said, as long as you're being transparent to authorities on how much you owe, it's typically not a crime - but it will likely attract interest and extra fees, possibly at punishing levels (depending on how you go about it). In the end, it's in the interest of the State, like any other creditor, that you don't actually die of starvation (or worse). Getting a continued stream of money, even if smaller than you expected, is better than getting no money at all.
robomartin 5y ago
In the US, if you owe taxes, you can negotiate a payment plan with the government. Not sure of the details of the story we are commenting on so I can't say anything about what may have happened. As far as I know, there is not need to end-up on the street. On the other hand, trying to personally manage a large tax debt is a huge mistake. You have to hire an attorney with experience in the domain or you are not going to have the best possible outcome.
idunno246 5y ago
in the US the IRS is pretty known for working with you - if you call theyll set up a payment plan or whatever. ive known a number of people that got mildly burned by taxes, nothing crazy just unexpected, but with bigger numbers it could have been bad. When you have ISO(incentivized stock options), one of the incentives is you dont pay tax until you sell, which sounds great. There's this other way of calculating taxes, AMT(alternative minimum tax) which does not respect ISO, and you pay whichever is bigger. normally people dont get near AMT amounts, so most people dont know it exists. So when you exercise you think theres no tax, but then you do your taxes and realize actually you owe tax on money you never received.

noodlesUK 5y ago

I have no idea where you're writing this from, but in almost any western country that I have any knowledge about what you're describing is wilfully committing a crime.

ShivShankaran 5y ago
It's a crime only in US. Most civilized countries allows people to stagger their taxes.
jonas21 5y ago
In the US, it's not a crime as long as you file your taxes accurately. The IRS generally allows you to set up a payment plan or even settle for less than is owed if it would cause hardship to pay.
- toss1 5y ago
  Right, but you DO need to file the tax returns with the IRS, accurately reporting your income, and then actually negotiate the payment plan (and stick to it or renegotiate). We don't just get to unilaterally declare that 'I'll be uncomfortable paying taxes, so it can wait'... and then not bother to file or negotiate a plan, which seems to sum up OP's position. Wish him/her luck, they'll need it!
dragonwriter 5y ago
Concealing income is a crime, delaying payment is not (though you will pay penalties and interest). It's quite easy to get a payment plan where you do this and don't risk garnishment or other collection efforts as long as you follow it.
exolymph 5y ago
Who cares if it's not enforced? Granted, IRS does enforce, but apparently they take their time about it.
toyg 5y ago
As others said, as long as you're being transparent to authorities on how much you owe, it's typically not a crime - but it will likely attract interest and extra fees, possibly at punishing levels (depending on how you go about it). In the end, it's in the interest of the State, like any other creditor, that you don't actually die of starvation (or worse). Getting a continued stream of money, even if smaller than you expected, is better than getting no money at all.

robomartin 5y ago

In the US, if you owe taxes, you can negotiate a payment plan with the government. Not sure of the details of the story we are commenting on so I can't say anything about what may have happened. As far as I know, there is not need to end-up on the street. On the other hand, trying to personally manage a large tax debt is a huge mistake. You have to hire an attorney with experience in the domain or you are not going to have the best possible outcome.

idunno246 5y ago

in the US the IRS is pretty known for working with you - if you call theyll set up a payment plan or whatever. ive known a number of people that got mildly burned by taxes, nothing crazy just unexpected, but with bigger numbers it could have been bad. When you have ISO(incentivized stock options), one of the incentives is you dont pay tax until you sell, which sounds great. There's this other way of calculating taxes, AMT(alternative minimum tax) which does not respect ISO, and you pay whichever is bigger. normally people dont get near AMT amounts, so most people dont know it exists. So when you exercise you think theres no tax, but then you do your taxes and realize actually you owe tax on money you never received.