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I didn't pay my taxes in 2000. I owed about $3000 federal and $3000 to California. California will eventually catch up with you (it took 7 years for me) and ta

I didn't pay my taxes in 2000. I owed about $3000 federal and $3000 to California. California will eventually catch up with you (it took 7 years for me) and take the money directly out of your checking account. They will send you letters telling you that they are going to take the money out of your bank before they do it. The federal IRS will just keep sending you letters. It's worth paying up ASAP because the interest is substantial. I ended up paying about $800 in interest. None of these things ended up on my credit report, which was a relief but I thought was a bit weird. I've also heard that your passport won't be renewed if you owe the government money. However, I'm not convinced the IRS and the state department are well coordinated. I'm assuming it's more about preventing huge tax evaders from fleeing the country.

tptacek 18y ago
I don't believe the passport bit. I think it's probably apocrypha based on an alleged IRS trigger when you renew your US Passport overseas --- expat taxes are a thornier issue than stateside taxes.
- staunch 18y ago
  I seriously doubt the passport thing is true in the common case. You do need tax returns to file as the sponsor for a VISA application though.
yters 18y ago
Is there a threshold that your interest account has to pass before the IRS will take more drastic action?
- taxdodge 18y ago
  I've forgotten the details. At the time I was panicked so I did a lot of research on the subject. I vaguely remember that there is an upper limit to the amount of interest they can charge.
- sokoloff 18y ago
  I fell behind in filing by a couple of years back when I was doing a lot of daytrading, and because of the way the IRS gets its data feed of stock sales, but not associated cost basis, they were sending me bills for literally 7 figures of overdue taxes. (I'd done about $6mm of stock sales that year, naturally with a cost basis of somewhere pretty close to that $6mm.) They see $6mm in sales, treat it all as capital gains, compute the tax I owed on it (and obviously hadn't remitted), stacked up huge penalties and failure to timely file fees, etc. When I finally got around to filing the correct information (you have 3 years from the original due date of the return to file to claim a refund), they took the updated schedule D information, and cleared the account. In the 18+ months that they were sending me notices for over a million bucks, they never took any further action. So, I don't think it's a dollar threshold, but rather a time threshold at which point they start attaching wages, subjecting you to backup withholding, etc. Also, the stress totally isn't worth it.
jpcx01 18y ago
Is the statute of limitations (6 years) that's mentioned in the article BS? I sort of suspect it is. 6 years seems way too short.
- taxdodge 18y ago
  Federal used to be 6 years, now it's 10. States have different statutes of limitations. California doesn't have one.

tptacek 18y ago

I don't believe the passport bit. I think it's probably apocrypha based on an alleged IRS trigger when you renew your US Passport overseas --- expat taxes are a thornier issue than stateside taxes.

staunch 18y ago
I seriously doubt the passport thing is true in the common case. You do need tax returns to file as the sponsor for a VISA application though.

yters 18y ago

Is there a threshold that your interest account has to pass before the IRS will take more drastic action?

taxdodge 18y ago
I've forgotten the details. At the time I was panicked so I did a lot of research on the subject. I vaguely remember that there is an upper limit to the amount of interest they can charge.
sokoloff 18y ago
I fell behind in filing by a couple of years back when I was doing a lot of daytrading, and because of the way the IRS gets its data feed of stock sales, but not associated cost basis, they were sending me bills for literally 7 figures of overdue taxes. (I'd done about $6mm of stock sales that year, naturally with a cost basis of somewhere pretty close to that $6mm.) They see $6mm in sales, treat it all as capital gains, compute the tax I owed on it (and obviously hadn't remitted), stacked up huge penalties and failure to timely file fees, etc. When I finally got around to filing the correct information (you have 3 years from the original due date of the return to file to claim a refund), they took the updated schedule D information, and cleared the account. In the 18+ months that they were sending me notices for over a million bucks, they never took any further action. So, I don't think it's a dollar threshold, but rather a time threshold at which point they start attaching wages, subjecting you to backup withholding, etc. Also, the stress totally isn't worth it.

jpcx01 18y ago

Is the statute of limitations (6 years) that's mentioned in the article BS? I sort of suspect it is. 6 years seems way too short.

taxdodge 18y ago
Federal used to be 6 years, now it's 10. States have different statutes of limitations. California doesn't have one.