Most residents of the greater Chicago area probably recognize that owing back taxes to the Internal Revenue Service, or IRS, is a serious legal problem. The IRS has a number of powerful legal tools that it can use to collect tax revenues that are simply not available to other creditors.

Likewise, tax debts are treated differently in the bankruptcy process, making them even more likely to be collected.

However, one thing the IRS cannot do is jail an honest but unfortunate or perhaps hapless taxpayer who was gotten behind. In other words, a person who files a return and does his best to be truthful and honest, even if he makes some mistakes or takes a legitimate legal position that just turns out to be wrong, is not going to be accused of tax fraud or tax evasion.

On the other hand, not filing a tax return at all, or, perhaps worse, lying and being deceitful in the process of filing one’s taxes, can lead to criminal penalties in addition to rigorous collection efforts.

Moreover, just because jail is not on the table, it does not mean that dealing with a federal tax debt is a pleasant process. The iRS’s approach is typically to insist on collecting the amount owed through a payment plan or to take action against one’s assets so as to seize them and satisfy one’s tax debts.

This process can quickly leave a person in an economic bind. For this reason, those in tax trouble with the IRS, even if they have been honest throughout the process, may wish to evaluate their options with an experienced tax attorney in Northern Illinois.