Do You Think You Have the Luck of the Irish, Since the IRS Has Not Caught up With You (Yet)?

St. Patrick's Day is right around the corner, and with it, the question: do you have the luck of the Irish?  Some people with IRS problems certainly think they do.  A guy told me he had been running from the IRS longer than I have been alive.  Just "lucky," he guesses.  Here are 3 mindsets of some people who have (so far) outrun the IRS.  You be the judge of just how lucky these folks really are.    

1. As long as you file your taxes every year, you're fine!  The IRS can moan, groan, threaten, harass and demean you, but it can't send you to debtor's prison and it can't get blood from a turnip.  Did you know that a 5 year old can open a bank account in his very own name, if he has $25?  However, the enlightened tax evader cannot because the IRS would levy his account.   

2. The IRS can levy my paycheck, but I'll just quit my job and work somewhere else.  January 31 every year, the IRS gets a free set of new information on every working American whose boss claims wages as a business deduction.  This information is the W-2 form.  You can quit your job to spite the IRS or the president or anyone you choose, but will they really get the message?  When January 31 rolls around next year, you will have to quit again.

3. If I never file my returns, I'm off the radar--i.e. no return, no tax bill.  At some point, the IRS can and usually will file an estimated return for you based on those documents filed by your boss or whoever pays you (W-2's and 1099's).  If you don't appeal those numbers, they are the lay of the land for IRS collections and they add penalties and interest to make things interesting.  The worst part of this mindset is that the general 10 year statute of limitations for individual tax debts does not start to run until you file.  If you don't file, technically the IRS has forever to collect.

The big picture is this.  The IRS is vast and one hand often doesn't know what the other is doing.  It is generally painfully slow at EVERYTHING.  However, don't be fooled.  The mindset of nearly every IRS agent is-"payday someday."  In other words, "we always get our man!"  You think you're lucky?  The IRS is ok with that.  They will make you pay penalties and interest to keep your gloating to a minimum.

Travis Watkins
Senior Tax Attorney
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