What is a Delinquent Tax?

Alexis W.

A delinquent tax is a tax that is passed due. Taxes are fees collected by the government, in the form of property taxes, sales tax and income tax, among others. Individuals are required to pay both income tax and property tax at a set date, otherwise they may be considered delinquent.

Taxes become delinquent when they are not paid on time.
Taxes become delinquent when they are not paid on time.

Normally, a tax becomes delinquent as soon as the due date for payment passes. The specific required date of payment varies depending on the type of tax. Different rules apply for property taxes, income taxes and sales taxes, for example.

Property taxes become delinquent when they are not paid when due.
Property taxes become delinquent when they are not paid when due.

Property taxes are normally due annually. Sales taxes are due at the point of sale, which means the taxes are charged as soon as someone makes a purchase. If a person buys something out of state and does not pay sales tax, in the United States he is obligated to report that purchase on his state tax return and pay taxes on it at that point.

In the United States, income taxes are assessed on a pay-as-you-go system. Canada, England and many other countries also have a similar system. In England, for example, this system is called Pay As You Earn, or PAYE.

Under a pay-as-you-earn or pay-as-you-go system, taxes are taken out of workers' paychecks throughout the course of the year so an individual has paid in the required amount by the due date. If a worker does not withhold enough from his check, he may be considered late on his tax payment and have a delinquent tax bill. Self-employed individuals who do not receive regular paychecks are required to send in tax payments quarterly to ensure they are not delinquent.

When a person has a delinquent tax, fees are assessed. These fees usually include penalties and interest. The amount charged in fees depends on how late the taxes are and how much is owed. If the tax collecting institution, such as the Internal Revenue Service in the United States or the HM Revenue & Customs institution in England, determines that the nonpayment of taxes was willful, other penalties may apply, up to and including jail time.

An individual may also incur a delinquent tax if he does not declare all his income. For example, if a person hides some of his wages and the tax collectors find out, the person is delinquent in paying the tax on the undeclared income. Non-payment or under payment of property taxes can also result in delinquent tax liability.

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