Man Who Doesn't File Taxes for 12 Years Owes $26 Million, Most of Which Is Penalties and Interest

Chris Gaetano
Published Date:
Apr 5, 2019
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A Texas man who made money through farm work and agricultural equipment sales didn't file any tax returns or pay any taxes for 12 years, and he now owes the IRS $26 million, two-thirds of which is interest and penalties, according to the Wall Street Journal. The man believes he doesn't really owe that much because, in the absence of his own return, the IRS used its legal rights to fill one out for him, which he says references bank accounts and income that don't belong to him. These returns, further, tend not to account for deductions; his attorney says that his client had legitimate business losses that the IRS didn't consider when calculating the debt. Prior to getting a lawyer, he tried representing himself before the IRS twice, and lost both times, which was another mistake the Journal pointed to. 

However, far past the taxes themselves, two-thirds of the bill is penalties and interest. For example, there's the Failure to File penalty, which eventually grows to 25 percent of the unpaid tax, and the Failure to Pay penalty, which similarly grows. With penalties like these accumulating alongside simply interest, the tax debt swiftly ballooned past his ability to pay. 

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