Filing Taxes is one of the most important tasks that you have to carry out periodically as an adult. The most important thing to keep into consideration when it is about filing taxes is to ensure that the calculation of taxes is apt as per the place that you reside since the tax laws change from one place to the other. Wrong or no filing of taxes can be really challenging for the taxpayers which can be in form of back taxes, including the tax amount that is because of taxes paid to the government for the earlier years. The back taxes gather over a period of time and you may be especially prone to back taxes if you are indulging in self-filing of your taxes over the years. One of the reasons for this is that the tax laws, as well as regulations, keep on changing and you might need to follow a stricter set of tax regulations from the earlier year and even more if you need to move to another place which may have different laws. For any individual, it is a challenging task to stay well-informed on all the information when it is about filing taxes.                               

What are the challenges?

The back taxes can become very challenging sometimes even after many years of filing taxes. Once the Internal Revenue Service or IRS comes to auditing your accounts and fetches out the pending back taxes, they will only add to those penalties as well as interest that you are required to pay back. The resulting tax debt is therefore much bigger than the first amount of back tax. To pressurize you, several unfavorable actions including tax liens, tax levy, and wage garnishment may be put against you. These steps may jeopardize your financial condition which includes the risk of losing your savings, property, retirement funds, business, and other assets including vehicles. 

By using wage garnishment, the IRS gets to directly reach out to your employer and seize directly from them up to 70% of your earnings. This can make it hard for you to maintain your finances or take the right care of your family. On the other hand, as the tax levy such as the bank levy is placed against you, you will be updated about this decision through an e-mail. Once the levy comes into effect, the money in your bank account will be frozen. Thereafter, you will not be able to carry out any transaction from this account. You will be given 21 days to get in touch with the IRS and make arrangements for the re-payments of the tax debt. If you fail to do so, the money from the account will be transferred to the IRS permanently, which will be considered as tax debt settled.