Why Pay Taxes — The Short Answer, the Legal Reality & What to Do If You Are Behind
What This Video Covers
Everyone has wondered at some point why they have to pay taxes. This video answers that question directly — and then gets to the part that actually matters for most people watching: what happens when you do not pay, and what your options are if you are already behind.
Key topics addressed include:
- Why the tax system exists and what it funds
- The legal obligation to file and pay — and what “voluntary compliance” actually means
- What happens when individuals and businesses stop paying taxes
- Civil consequences of non-payment: liens, levies, wage garnishment, interest and penalties
- Criminal consequences of willful non-payment: tax evasion under IRC § 7201
- The difference between cannot pay and will not pay — and why it matters to the IRS
- Resolution options for taxpayers who are behind: installment agreements, Offers in Compromise, Currently Not Collectible status
- Why contacting a tax professional before the IRS contacts you produces better outcomes
Why This Matters
The tax system funds everything the government does — roads, defense, public health, courts, schools, emergency services. That is not a political statement. It is the mechanical reality of how a functioning government operates. Without tax revenue, none of those functions continue.
The system works because the overwhelming majority of taxpayers comply. When they do not, the consequences are real — for the country and, more immediately, for the individual taxpayer who stops paying.
About the Presenter
Benjamin A. Goldburd, Esq.
Goldburd McCone LLP
Benjamin brings focused experience in IRS collection defense, including lien and levy disputes, CDP hearings and negotiated resolutions. Our team’s combined backgrounds in accounting, business and wealth management ensure that enforcement responses account for the full scope of a client’s financial position.
Frequently Asked Questions About IRS Scams
Is paying taxes actually legally required?
Yes. The obligation to file a return and pay the tax shown on it is a legal requirement, not a suggestion. IRC § 6012 requires individuals with income above applicable thresholds to file. IRC § 6151 requires payment of the tax by the due date. The characterization of the U.S. system as one of “voluntary compliance” refers to self-reporting — you calculate and report your own liability rather than waiting for the government to do it for you. The obligation itself is mandatory, and the penalties for non-compliance range from financial to criminal depending on the circumstances.
What happens if I just stop paying taxes?
The consequences escalate over time. Interest accrues from the original due date. Failure-to-pay penalties begin at 0.5% per month and accumulate up to 25% of the unpaid balance. The IRS can file a Notice of Federal Tax Lien, which attaches to all of your property and appears on your credit report. It can issue levies against your bank accounts, wages and other assets. If the IRS determines that your failure to pay was willful — that you knew you owed and chose not to pay — criminal prosecution for tax evasion under IRC § 7201 becomes possible, with penalties up to $250,000 and five years imprisonment.