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IRS could knock out fighter

By Kay Bell · Bankrate.com
Tuesday, March 19, 2013
Posted: 3 pm ET

Nick Diaz, an Ultimate Fighting Championship, or UFC, welterweight, may be in for his toughest match ever.

After a loss in Montreal over the weekend, the mixed martial arts combatant let it slip that, "You know what? I've never paid taxes in my life. I'm probably going to go to jail."

You know what, Nick? You might be right.

Diaz mentioned his tax filing, uh, let's call it an "oversight," as a way to explain why he has to keep fighting. And Diaz's admission, if true, is likely to set him up for a new, tougher match with the Internal Revenue Service.

Going toe-to-toe with the federal tax collector is not for the faint of heart. It might not be as physically demanding as the combination boxing, jiu-jitsu, tae kwon do, karate and wrestling moves employed in a UFC match, but it definitely can take a toll.

Here's what the IRS says on its website about nonfilers:

The IRS is taking enforcement steps for those who repeatedly choose not to comply with the law. IRS employees will prepare returns when taxpayers do not file. The returns prepared by the IRS might not give credit for deductions and exemptions a taxpayer may be entitled to receive. Bills will be sent to those taxpayers for the tax due, plus penalties and interest.

People who repeatedly don't comply with the law are subject to additional enforcement measures.

Additional enforcement measures typically include liens, like those filed against a lot of celebrities who didn't comply with tax laws.

But tax scofflaws also can go to jail. Just ask actor Wesley Snipes, who is serving out his term in a federal penitentiary for failure to file three years' worth of tax returns.

It sounds like Diaz has failed to file a whole lot more than just three 1040s.

Even his employer is a bit concerned.

"At the end of the day, Nick has been in the sport forever. He wanted a shot at the title, he got a shot at the title and he got paid a lot of money for it. What's sad is he better go pay those taxes, as soon as he gets that check," UFC President Dana White told the AP.

Don't end up like Diaz. If you haven't paid your taxes, find a tax professional who specializes in overdue tax cases. Then get right with the IRS before you are hit with the kind of tax knockout that Diaz is likely to suffer.

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Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and a co-author of the e-book "Future Millionaires' Guidebook."

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