One thing to bear in mind is that the IRS doesn’t ambush taxpayers. If she had a job or contract employment, the IRS has a taxpayer ID with income but no return. The calculate a tax and send a letter with a bill (the tax plus fines/interest). They continue to send letters as the amount increases. Don’t be surprised if there have been letters going back to the year she didn’t file. In my sister’s case, she had the mindset that if she didn’t open the letters, she didn’t have to deal with whatever it was. But she realized somewhere deep down that she shouldn’t just throw the letters away.
There are also some things you can do before hiring someone. Getting all of your sister’s records together and reconstructing the tax years in question is going to be necessary, If her situation is as you stated, it’s probably simple to calculate the tax she should have owed (the IRS calculates very conservatively). If you think you’ve uncovered an error on the IRS’s part, there is actually an IRS Ombudsman’s line that can be called to find out if there is a way to clear things up without hiring someone (I did this when they lost my check, back when we attached checks to our returns, and sent me a bill with fines and interest).
But if she owes a big number, you are right that it will be cheaper to be a couple thousand dollars to reduce or remove the debt. And if you can afford it and she can’t, then you’re a good brother.
Substitute “daughter” for “sister” and “father” for “brother”. Accuracy matters, dammit!
I do appreciate your comments, but I have no desire to embroil myself in this any more than necessary. She’s an adult and she needs to decide what to do. All I can do is advise her, but I can barely balance a checkbook, let alone decipher her taxes, and have no wish to attempt to do so. Hell, I don’t even know if she kept copies of her W-2s.
If she has ANY documentation from that time period, it would behoove her to find it and have it at the ready when she speaks with an attorney or the IRS or whoever.
Well if she was an employee, the withheld taxes would be close to adequate. I assume she had her own sort of business, and the IRS guess the highest possible number from the bank activity…
Nope. The reason I don’t know what she was doing is because she’s always been a bit of a job hopper and I just couldn’t keep track, but I do know that she’s never had her own business. She’s also never had a big salary, so I’m a bit skeptical about this “two years” business. I have a sinking feeling it was longer than that because of the 40K number.
I think those are a better idea than a Tax Attorney- the iRS here is not proposing Fraud penalties.
Having done more than my share of 'substitute for return" when the iRS does one- they generally give you NO deductions at all. Have the EA prepare real returns, and submit them in response.
Only if the EA says you need one- which they might. An Attorney will generally want $5000, and if she doesnt have that, it just makes things worse.
Yes, that is a good EA and the IRS will do that- sometimes.
Like i said when they do a 'substitute for return"- they give you NO deductions.
Yes, but the IRS will wait for three years after you fail to file to file a “substitute for return”. Giving you plenty of time to file a real one. They will send some general inquiry letter to the “last known address”.
Also, if most of the income is a husbands, there is the “innocent spouse” provisions.
Given that Chefguy thinks the time period in question was at some point prior 2018 (the time of her brother’s death, as noted in post #19), it does seem possible (and probably likely) that she’d already been getting notices from the IRS for some time, assuming she hadn’t moved or something where the IRS no longer had a current address for her.
Yes, I concur on that. But “last known address” note. The IRS doesnt go searching for you for routine notices. They mail to the last address they have on file.
She’s been in that same apartment for quite awhile. I actually stayed there in 2018 on a visit and I know she was in there prior to that for a number of years.
Are you sure this is legit? I get phone calls at least three times a week from scammers claiming I owe back taxes and they will help me resolve the issue. Yeah, right. Some people hear IRS and immediately get shook up and get taken in by fast talking scammers. Have you, or she seen any actual correspondence from the government?
According to the random phone calls I get, you don’t get a lot of time. You have to press “1” to arrange payment immediately, because the police are already on their way with a warrant. Just like they were with the phone call two days ago. …and a week before that.
You have to also consider the possibility that she’s mistaken about the number. Or misstating it.
Failure to properly adult can take a serious toll on the quality of your own life over time.
I hear ads on the radio all the time about tax advisors helping get the IRS off your back and negotiating settlements with the IRS to remove liens and garnishments. Hopefully she can get herself on track.
