Owing taxes can feel overwhelming, but ignoring that debt doesn’t make it go away. Avoiding action can lead to serious financial and legal consequences. When we put off dealing with tax obligations, the government doesn’t forget. Instead, the situation usually becomes more difficult and more expensive over time. Our Scottsdale, AZ tax debt lawyer can explain what happens if you ignore your tax debt and why it’s important to respond sooner rather than later.
Interest And Penalties Will Add Up
One of the first things that happens when you don’t pay your tax bill is that interest and penalties begin to accrue. The IRS starts charging interest from the day your payment is due, and the longer it goes unpaid, the more you’ll owe. In addition, failure-to-pay and failure-to-file penalties can stack up quickly. Over time, this can turn a manageable tax bill into something much more serious.
The IRS May File A Tax Lien
If we continue to ignore our tax debt, the IRS can file a Notice of Federal Tax Lien. This public document alerts creditors that the government has a legal right to our property. It can affect our ability to get credit, sell property, or even refinance a home. A tax lien doesn’t mean immediate seizure, but it does put our finances in a difficult position. It can stay on our credit record even after we’ve paid off the debt unless we take specific steps to remove it.
Wages And Bank Accounts Can Be Garnished
Ignoring tax debt for long enough can lead the IRS to levy our wages or bank accounts. This means the government can legally take money directly from our paycheck or withdraw funds from our account without needing a court order. It’s one of the most stressful consequences we might face because it affects our day-to-day financial stability.
Tax Refunds Will Be Taken
If we’re owed a refund in future years, the IRS will likely apply it to the debt automatically. While this might seem like a minor issue, it limits our ability to use that refund for other expenses. It also shows that the IRS has our case flagged and is actively working to collect what we owe.
Legal Action May Follow
In rare cases, long-term refusal to address tax debt can lead to more severe legal consequences, including criminal charges for tax evasion. While this is less common, it is still a risk—especially if the IRS believes we have deliberately tried to hide income or avoid payment. Even without criminal charges, the legal process for collection can be burdensome and drawn out.
We Don’t Have To Face It Alone
If you’re dealing with tax debt in Arizona, you’re not the only one. Many people fall behind for reasons beyond their control—job loss, medical expenses, or simple filing mistakes. The key is to take action. At Wright Law Offices, we work with clients who are ready to move forward and find solutions to tax issues before they become worse. Let’s take the next step together. If you’re ready to deal with your tax debt, give us a call today. Our skilled professionals are here to help you understand your options and take the pressure off your shoulders.