Could a landlord go to jail for not paying taxes on their rental properties?

Question: Since my father died several years ago, my mother has tried to manage their three Arizona rental homes. We live out of state, but we come to see my mother 3-4 times a year and try to help manage the rentals. Until recently, we didn’t realize that my mother had not been paying any of her taxes (e.g., letters from the IRS). On TV, we see ads that the IRS, if taxes are not paid, can “seize” the taxpayer’s assets or even put a taxpayer in jail. Could my mother go to jail after years of not paying her taxes?

Answer: No. Your mother’s situation is common with senior citizens when the deceased spouse paid the bills, taxes, etc. The IRS will try to reconstruct the taxable income for the years of unpaid taxes. The taxpayer then has the option to pay the taxes and sue in federal court for a refund of the taxes or wait for the IRS to file to collect the taxes in tax court before an administrative tax judge.

Note: The IRS can be more aggressive with nonpayment of taxes by actors or other famous people to “scare” all taxpayers to pay their taxes. For example, the actor Wesley Snipes was fined $5 million and served 2 ½ years in federal prison after the IRS reconstructed his income to show more than $15 million of unreported income from 1998-2003.

Contact real estate attorney Christopher A. Combs at chris@combsandsaal.com .

This article originally appeared on Arizona Republic: Could a landlord go to jail for not paying taxes on their rental properties?