My father in law was a truck driver until very recently. He has failed to file and / or pay his taxes for the last few years and owes upwards of 80k in taxes, fees and penalties.

I have seen several commercials advertising companies that can mitigate your taxes with the IRS resulting in you paying less, are any of these companies worth while? What advice does our resident tax people have for me to suggest to my wife's dad?

Generally speaking, these firms don't do much that you can't do for yourself - technically. In other words, they pretty much take advantage of existing debt resolution programs to reduce the figure the IRS is willing to resolve your issues for to as little as possible.

The thing is, unless you know exactly how to navigate the system (i.e., how to work the numbers, what language to use, etc.), it can be a royal PITA and you may not realize the maximum benefit from the same.

Think of these tax relief companies as advocates or your personal representative to the IRS. I have no idea what their fees are like, but for $80K, I would think it's probably well worth it to have a professional negotiate
an OIC for your FIL.

-Rob

I have a friend that does tax returns and (FWIW) he once told me that p much if one is of working age and has any tangible assets, the only tax cuts he's personally seen extended are to those basically destitute.

He said there's a worksheet to determine assets to liabilities, and if you're on the plus side, the implication is you liquidate what you have to pay the debt down to negative wealth, and then they will consider a reduction.

Long story short, he didn't think those outfits do much more than generate fees by reviewing past returns for lost deductions or making some calls. That said, he might've been giving me a very broad opinion of something perhaps different in specific circumstances-or based upon his dealings. But someone here might have a wonderful experience with these outfits. And that's not to say they don't earn their fees bc I have no experience with such stuff.

To conclude, my friend said returns must be filed for the missing years before the IRS will even talk. Then the asset/liability worksheet must be done in that order. Only then will a reduction be considered-YMMV. Good luck

I have a friend who runs his own business and did not file taxes for a number of years... he went to a CPA to consult about it and this is what the CPA told him:

"When you file these back taxes they will go directly to collections..... directly to the collections department... they do not go through all the other places that check for errors or cause red flags...."

Now that advice was from 20 years ago and maybe the IRS has changed that since then....

I would have your F-I-L contact a reputable CPA or tax attorney to speak to them on his behalf.

I would not deal in any way with the scamsters advertising on TV (or wherever). They're selling snake oil to the uninformed.

I would also not have him try to disburse easily traceable assets to friends/relatives, thinking they won't find out and create legal complications.

I am not an attorney so take that for what it's worth.

Your FIL can go online and create an account on the IRS's website, he can see how much he owes. There will be tabs there for setting up a payment plan, it may or may not work. If it doesn't he will have to call


Without a wad of cash they won't negotiate, payment plan only. I was told that after paying for a while that they will revisit and possibly knock off some fees and interest , I am due to make that call

There are 3 things you can do to negotiate with the IRS:

1) Negotiate the returns. If the IRS does not receive returns from you, then they will apply a random number based on your past filings and use that as the basis for all assessments, penalties, and interest. So, the first step is to go back and make sure that you have correct returns filed for each permutation of tax year and tax form. Be thorough, the IRS sends certified mail like it is going out of style so it is easy to miss some stupid estimated tax filing for the 3rd quarter of 6 years ago.

2) Negotiate the penalties. For each penalty assessed, submit a written request for forgiveness. Do some research as to what reasons qualify for forgiveness, and what reasons might qualify as undue hardships.

3) Negotiate the repayment amount on your principal liability and timeline for repayment. You'll enter into a contract with the IRS to make these payments.

quote:

He has failed to file and / or pay his taxes for the last few years and owes upwards of 80k in taxes, fees and penalties.

If he has not filed then IRS may have filed for him. If he was a contract driver & issued a 1099, then IRS filing would have 0 expenses. If he was issued a 1099 then it is unlikely he owes $80,000, in fact he may owe nothing.
He needs to go to a knowledgable CPA or Enrolled Agent that can access his IRS files & then file the tax returns. He should not contact IRS himself & should never sign any IRS document unless the CPA says it is OK. I have a truck driver client in the same situation, but he thought he could do it himself before coming to me, which has created a mess.

He was an OTR truck driver, about a year ago he had to have hip surgery and after that he changed to delivering campers. He just had emergency brain surgery and cannot drive a truck for at least 2 months.

The last year that we KNOW he was up to date on his taxes was 2016. From what i understand he did not file in 2019 but he is not really forth coming with information. My wife's aunt did his taxes in 2020 and told him how much to pay but he never paid it.

The dumb ass already paid a company around $1700 to work things out with the IRS but i am pretty sure it was a scam as we cannot find any info on the name of the lawyer he gave us.

The man is stupid with money, he has filed bankruptcy once about 12 years ago and had to sell off property to avoid doing it again about 7 years ago, this will be the 4th or 5th property he has lost due to him being an idiot with money. We will be talking to him later on today and my wife will possibly be buying the house and land he is on so that he does not lose it and so my wife can have something from her mom & dad, although this will not be enough to get him out of debt.

He also pawned all his guns, which my wife will be going to collect today as long as he allows her to hold them until he can repay her, last time he did this it took a year for him to pay me $600 for getting his guns out of pawn.

I am convinced the man is either addicted to money or keeping appearances as he has always had to have the 'most expensive' or 'best' thing, or 'brand new truck' i have been with him at a dealership and he will NOT negotiate, he gladly pays whatever the dealership asks.

My wife is done with him, if she can help him by buying the house and land for a reasonable price we will let him live there rent free for a year so he can get shit figured out but then he'll have to pay. If we can get him out of this hole we will not be helping him again.

ETA: I think he needs to talk to a local (Jacksonville AL) tax attorney, let his daughter take over his property and all property related debt, and then work out a payment plan with the IRS and after a year or so try to get his outstanding debt reduced. He is very hard headed and trying to reason with him or explain things to him is difficult, he absolutely will not listen to a woman.

He says he wants to sell the house for the 'top dollar' but our question was then where is he going to live? Yesterday he had $50 to his name, he has no form of income currently as his SSI is being completely garnished. He had to give back the new truck and new car yesterday and is borrowing an extra vehicle from his mother currently. He does not think even two steps ahead and always wants instant gratification.

He needs to contact a CPA or tax attorney that specializes in this area.

Do not contact any company he sees on TV.

state tax problem. I paid my qtr estimated with an echeck and got a transaction confirmation for dept of revenue but I must have fat fingered an acct # but it could have been an entry error by state. I do this regularly with both fed and state qtrly estimated tax and have never had a problem.

A few weeks later I got a bill for tax amount plus penalty. I sent cashiers check that day for tax but did not pay penalty. my bank had no record of previous transaction. I put a note in payment explaining.

A few weeks later I get a double penalty. Wrote another letter asking penalty be forgiven.

Couple weeks later another notice with a big penalty increase.

I went to dept of revenue in person and pleaded my case. Since I had paid the 1st notice tax promptly the cs rep said no penalty. I asked why my explanations were ignored. Her response was minimum wage clerks don't even read explanations they just add penalty. She told me to write another explanation and I told her I'd done that a couple times already. She smiled slyly and said not with me you haven't and she told me what to say. Problem solved and advice was if anything should happen in the future come in and sort it out in person.

Strongly recommend to please stop discussing here any further details

With multiple years not filed the IRS may move it to the criminal division for willfully repeatedly failure to file.

This would be an attorney discussion not a CPA.

quote:

Originally posted by Jamess1:
Strongly recommend to please stop discussing here any further details

With multiple years not filed the IRS may move it to the criminal division for willfully repeatedly failure to file.

This would be an attorney discussion not a CPA.

It's not willfully, he's just a dumass. Although, by this point I guess it could be considered willful....

We got him the info and hours of the tax office and informed him to call Tomorrow morning and ask for a payment plan. This was after we consulted a local CPA and called around to a few law offices.

quote:

Originally posted by Jamess1:
Strongly recommend to please stop discussing here any further details

With multiple years not filed the IRS may move it to the criminal division for willfully repeatedly failure to file.

This would be an attorney discussion not a CPA.

Concur. Your FIL needs to seek out a competent tax attorney licensed in his jurisdiction.

Looking over your first post and followup... my advice is

Pick up the guns from the pawn broker.... send him a certified letter that he can get them back when the debt is paid.

Send him a second letter with the advice that he needs to hire a local professional... CPA or Lawyer to deal with his tax debt and get then get the hell away from the entire thing....

quote:

Originally posted by Legal Beagle:

quote:

Originally posted by Jamess1:
Strongly recommend to please stop discussing here any further details

With multiple years not filed the IRS may move it to the criminal division for willfully repeatedly failure to file.

This would be an attorney discussion not a CPA.

Concur. Your FIL needs to seek out a competent tax attorney licensed in his jurisdiction.

I’ve known several people who haven’t filed in twenty years. They don’t own anything, and they don’t work at W-2 jobs. They owe the IRS, but they are small fry in the great scheme of things. It doesn’t seem that the IRS or any federal DA is interested in spending money to prosecute people who have no assets. They can’t squeeze blood from a turnip, and they aren’t spending 65k annually to house and feed them in prison. Westley Sipes? Yes. Joe blow trucker? Not so much.

At the end of the day, the IRS would rather have you inside the system than outside. Their goal is to get you filing and paying your taxes going forward more so than working through the past. I’d get on a payment plan for the past taxes and then pay/file on time going forward.

quote:

Originally posted by BurtonRW:
I would think it's probably well worth it to have a professional negotiate
an OIC for your FIL.

-Rob

OIC (Offer in Compromise)