Unpaid Taxes: A Serious Situation

The failure to pay your taxes can have extremely serious consequences. Not paying your income or property taxes can lead to having liens filed against your property and having your wages garnished to pay your outstanding tax debt.

Louisiana residents and anyone who has earned income from Louisiana sources are required to file Louisiana Income Tax Returns. Louisiana residents must include on their tax returns any income earned outside of Louisiana. These returns are due on May 15 each year. If necessary, applicants can request a six-month extension of time to file, but this request must be sent to the Louisiana Department of Revenue before May 15. If you fail to file a tax return, you will be subject to penalties and interest. The penalty for filing a late tax return is five percent of the tax due for each 30 day period that you continue to fail to file, up to twenty-five percent of the total tax. There can be other penalties if you pay your taxes late as well, and interest is added to any unpaid taxes.

In order to collect these penalties, the State is authorized to seize and sell any of the taxpayer’s property. This includes bank accounts, which are the most commonly seized property in such situations. The state can also seize your wages if you are delinquent in paying your taxes or penalties. This is accomplished through wage garnishment, and the state can garnish your wages for up to 25% of your pay.

Failure to pay property taxes can have similarly serious consequences. While income taxes are administered by the State, property taxes are collected by parishes and cities. This does not make the penalties any less severe. If you fail to pay property taxes, the city or parish is entitled to file a lien against your property for the amount of the tax owed. This lien stays in the mortgage records of the parish until you have paid the tax. This creates problems with the title to your land, and it can prevent you from selling or transferring your property. If such a lien is filed, you are responsible for not only the amount of the lien, but also the cost to the parish or city of recording the lien.

If you have failed to pay or to file your taxes, you should speak with an attorney immediately. An attorney can help you to navigate the process of paying off what you owe, and removing any garnishments, levies, or liens. In certain cases, an attorney may be able to negotiate with the taxing body to lower your payments. Attorneys can also help you to resolve any disputes you have with the Department of Revenue, the parish, or the city regarding the amount of the taxes owed. While the penalties for failure to pay or file a return are severe, attorneys can usually help.

Article © The Colvin Law Firm 2009.

Image: "Tax," originally uploaded to Flickr by Phillip.