Every American citizen is required by law to pay their taxes. The amount of money in taxes you owe will depend on many different factors related to your annual income and may not be the same every year. Sometimes, people neglect or forget to pay their taxes, but they are still on the hook for the money they owe the government. If you have not paid your taxes from any previous year, you may owe back taxes. Exactly how long you have to pay your back taxes will depend on who you owe the money to and if any exceptions apply.
Taxes are paid at the state and federal levels. Your home state will assess taxes and the Internal Revenue Service (IRS) will determine taxes at the federal level. However, there are statutes of limitations in place that limit the amount of time the state and federal government have to collect your back taxes. For California, this time limit is 20 years. For the IRS, the time limit is only 10 years. Trying to outlast the deadline is not a smart idea as the government may assess penalties against you, including criminal prosecution, during this time.
If you have not paid your taxes for several years, or even for just one year, you may owe back taxes to the state, IRS, or both. Our Sacramento tax attorneys are here to help you straighten out your tax situation and hopefully avoid costly penalties. Call the NewPoint Law Group, LLP at 800-358-0305 for a legal consultation.
Time Limits on Paying Back Taxes in California
Taxes are collected at the state and federal level, so California has its own laws regarding taxes apart from the IRS. There are time limits on when the state may begin collecting back taxes and deadlines for collection. If the state has not collected all back taxes from you by the end of this time limit, you may not have to pay the rest.
According to § 19255 of the California Revenue and Taxation Code, the state has 20 years from the date your taxes become due and payable to collect. Generally, once back taxes have been assessed, they are due in full as soon as possible. However, many people have difficulty paying significant back taxes all at once.
If you cannot afford to pay your entire back tax balance at once, the state government may allow you to be placed on payment plans. Payment plans often impose their own deadlines separate from the 20-year statute of limitations. If you miss your payment plan deadline, you might be subject to other penalties and fees. According to § 19008 of the California Revenue and Taxation Code, a payment plan must be paid in full within 3 years. However, these plans are subject to changes or alterations, so your experience may be different.
Statutes of limitations and deadlines may be suspended or put on hold under certain conditions, adding more time to the clock. Suppose the state files a civil action against you, or files an action in probate court. In that case, the deadline is extended until the judgment against you is satisfied or becomes unenforceable under different laws applying to civil judgments.
If you owe back taxes to the State of California, you should speak with a lawyer as soon as possible. Our Elk Grove, CA tax attorneys will help you decide which course of action is best for your case and help you avoid additional civil or criminal penalties.
Federal Statutes of Limitations on Back Taxes in California
Federal statutes impose a slightly more forgiving deadline of only 10 years to collect back taxes. If the federal government does not collect taxes from you during this time, the statute will lapse, and they will be barred from collecting. This law can be found under § 6502 of the Internal Revenue Code. Other than the difference in time limits, the federal government follows similar procedures to California for collecting taxes. Deadlines may also be extended for similar reasons, such as when the federal government initiates a civil action against you. Much like at the state level, the deadline to collect extends until judgment is satisfied or expires.
If you owe back taxes to the federal government, you are no longer dealing with California but instead with the IRS. Paying your back taxes can feel like a daunting and complicated task. Many people cannot afford to pay their back taxes. Our California tax attorneys are here to help with your federal back taxes.
Do Not Try to Wait Out Your Tax Obligations in California
If you owe back taxes to the State of California or the IRS, you might be wondering if you can outlast the statute of limitations. By running down the clock, the government will be barred from collecting your back taxes and you would be off the hook. However, this is not a smart idea as the government, state and federal, can assess a variety of penalties before time runs out.
If you owe back taxes and the government finds out about it, they may initiate legal proceedings against you. A civil judgment could not only extend the deadline but also add more fines and fees to your total bill. Also, if your behavior amounts to criminal offenses like tax evasion or fraud, you could be hit with criminal penalties, including jail time.
Finally, the government can still try to recover the back taxes you owe by placing a levy on your property or income. For example, your wages could be garnished until your debt is paid off, or your property could be sold off. Our Stockton, CA tax lawyers can help you come up with a strategy for paying your back taxes and hopefully dodging any serious penalties.
Call Our California Tax Law Attorneys for a Legal Consultation
If you owe the State of California or the IRS money in back taxes, you could be in serious trouble. This kind of debt could lead to expensive civil penalties or even criminal prosecution. Call our team of California tax lawyers right away for help. Call the NewPoint Law Group, LLP at 800-358-0305 for a legal consultation today.