In our experience, when clients meet with us they are worried that they may go to jail for either not paying their overdue taxes, or not filling over a long period of time.

If you have overdue taxes, no, you will not be going to jail. This is because a crime has most likely not been committed. It is almost never a crime to fail to pay the tax when you file a return

If you have not filed your taxes, you have arguably committed a crime. However, your chances of being sent to jail are very slim. People who are prosecuted for willful refusal to file a return generally fall into two categories

The High Profile Taxpayer- High Profile Taxpayers are usually prosecuted to make a statement to the rest of us. These situations make headlines and scare others into compliance. Being the average American who neglected to file on a 30,000 a year income isn’t quite as grand.

The “In-Your-Face” Tax Protestor- These taxpayers or tax protestors rather, gain the attention of the IRS because they taunt the government. Their attitude is “the IRS doesn't have the guts to prosecute”. There is nothing that will make the IRS more resolute than a defiant tax protestor.

Yes. The extension of time to pay tax is obtained by filing Form 1127. The extension will allow you to avoid any late payment penalties, but it will not avoid interest. You should understand that Form 1127 is an obscure form. The IRS is not likely to tell you about Form 1127, but we will.

Yes you do, but this hasn’t always been the case. Before the IRS Reform and Restructuring Act passed in July of 1998, the IRS would routinely seize paperback books, plastic dishes, moth-eaten clothing and other worthless stuff; not to get any money, just to cause hardship for the tax debtor and to generate fear in the hearts of every other taxpayer. The stories may be exaggerated, but they have a few grains of truth. The IRS was and still is relentless in its quest to “get the money”, but there is a provision that allows you a “Collection Due Process Hearing” before any further collection action is taken.

At a social event a few years ago, a friend of mine concerned me and told me he had just received a notice of audit. My friend wanted to know what triggered the audit. He said “I just know it’s the home office deduction I claimed. I’ve heard the IRS hates that deduction. It’s just a giant audit red flag.

I represented my friend in the audit, and it was clear from the start that the home office deduction did not “cause the audit”. The audit was probably “caused” by the fact that my friend had made a very large non-cash charitable contribution for which he took a proper deduction. In the audit, I spent less than two minutes proving that the home office deduction was legitimate. I spent twice as much time making small talk with the auditor about her family and the weather. The charitable deduction which was thoroughly documented and substantiated was clearly the target.

The innocent spouse provisions of the internal revenue code are among the most equitable and taxpayer-friendly provisions in the entire code. I have saved my clients thousands of dollars by using the innocent spouse provisions.

Although Innocent Spouses are an important legal benefit, there’s an easier way to avoid liability for your spouse’s tax debts: Just don’t file a joint return! If you are uncertain whether your spouse has reported all of his or her income or whether your spouse has paid his or her share of the taxes, it is your right to file “married filing separately”.