I haven’t filed my taxes for an obscenely long time
September 12, 2018 4:16 AM Subscribe
I haven’t filed my taxes for an obscenely long time, like a decade. Fear, procrastination, periods of unemployment, laziness, etc., etc. I stopped filing when I was a realtor as filing taxes became much more complicated and I needed to track expenses. It piled on from there – I can’t file this year because I need last year’s info and I can’t do last year’s cause I didn’t file the year before that and so on. About five years ago I was garnished a huge sum against my savings account which I probably didn’t really owe had I filed and claimed deductions.
Now, I usually work as a contract project manager and make good money (with taxes taken out, not like in real estate). However, I’m very afraid of having my savings wiped out again. My current contract ends in a few months and while I “shouldn’t” have any problem finding another gig, I never know how long it will take and I don’t want to be caught unemployed with no money to live on. I bought a cashier’s check to keep some money liquid so it can’t be taken from my account. What’s the best way to keep my money safe while things are sorted without keeping cash under the mattress?
I need to face the music but where do I start? In the last 10 years, I’ve moved a half dozen times and I don’t have many of my W2s. A few friends have given me the names of their accountants but I haven’t yet reached out to anyone and they seem really expensive. I’ve seen ads for companies that work with people that owe the IRS money. They seems as sketchy as lawyers who advertise and I don’t know how they work or how much they cost.
I would like to get my taxes filed and set up payment plans with the IRS and the State of CA Franchise Board for any money that is owed. So, where do I start in order to dig myself out of this hole without it costing me a mint?
Now, I usually work as a contract project manager and make good money (with taxes taken out, not like in real estate). However, I’m very afraid of having my savings wiped out again. My current contract ends in a few months and while I “shouldn’t” have any problem finding another gig, I never know how long it will take and I don’t want to be caught unemployed with no money to live on. I bought a cashier’s check to keep some money liquid so it can’t be taken from my account. What’s the best way to keep my money safe while things are sorted without keeping cash under the mattress?
I need to face the music but where do I start? In the last 10 years, I’ve moved a half dozen times and I don’t have many of my W2s. A few friends have given me the names of their accountants but I haven’t yet reached out to anyone and they seem really expensive. I’ve seen ads for companies that work with people that owe the IRS money. They seems as sketchy as lawyers who advertise and I don’t know how they work or how much they cost.
I would like to get my taxes filed and set up payment plans with the IRS and the State of CA Franchise Board for any money that is owed. So, where do I start in order to dig myself out of this hole without it costing me a mint?
This is going to sound crazy but... call the IRS! They are totally used to people procrastinating about paying their taxes. They just want you to pay the money and they can get you copies of your old W-2s.
This is going to be a pain in the ass but you can do it; an accountant might help but if you just want to get it done, and not worry about minimizing the amount you owe, a trusted friend who is good with money and won’t judge can at least help you get started.
Let go of the shame and the rest is not that bad (I know because I am a happy, productive 40-year-old who never filed her taxes until she was like 28 and got her wages garnished by the IRS as a result). A lot of people do this. It’s not the end of the world.
posted by mskyle at 4:52 AM on September 12, 2018 [32 favorites]
This is going to be a pain in the ass but you can do it; an accountant might help but if you just want to get it done, and not worry about minimizing the amount you owe, a trusted friend who is good with money and won’t judge can at least help you get started.
Let go of the shame and the rest is not that bad (I know because I am a happy, productive 40-year-old who never filed her taxes until she was like 28 and got her wages garnished by the IRS as a result). A lot of people do this. It’s not the end of the world.
posted by mskyle at 4:52 AM on September 12, 2018 [32 favorites]
Nthing hiring an accountant to help you. If you didn't owe the taxes that were garnished, an accountant can help figure that out, too. I'm sure they've seen much worse than your situation.
posted by sarajane at 5:08 AM on September 12, 2018
posted by sarajane at 5:08 AM on September 12, 2018
Nthing calling the IRS! They will help you, and they are very understanding and pleasant. Be sure to take notes and get the "agent number" of the person who takes your call. Ask them to repeat it if necessary; they say it all day long, and it can be hard to catch.
posted by jgirl at 5:53 AM on September 12, 2018 [1 favorite]
posted by jgirl at 5:53 AM on September 12, 2018 [1 favorite]
I watched my Dad go through something similar - not with his personal taxes, but with the taxes on my Grandmother's estate which he was executor of. He'd had a year where something got complicated and he wasn't sure how to proceed, so he just... didn't. And then it piled up, for 10 years.
Eventually I found out what was happening and I dragged Dad to an accountant that a friend had recommended. The accountant looked over what paperwork we had, figured out what data & paperwork we needed to aquire & what we needed to do to get it, figured out how to minimize the late penalties, and then filed everything for us. And no, he wasn't cheap, but he had knowledge and skills that we didn't, and it was worth it to get that millstone from around my Dad's neck.
I'm not American so most of the specifics of our experience aren't transferable, but even as a non-American I've heard that the IRS is very inclined to be helpful towards people who are trying to sort out unpaid taxes.
posted by Secret Sparrow at 6:01 AM on September 12, 2018 [1 favorite]
Eventually I found out what was happening and I dragged Dad to an accountant that a friend had recommended. The accountant looked over what paperwork we had, figured out what data & paperwork we needed to aquire & what we needed to do to get it, figured out how to minimize the late penalties, and then filed everything for us. And no, he wasn't cheap, but he had knowledge and skills that we didn't, and it was worth it to get that millstone from around my Dad's neck.
I'm not American so most of the specifics of our experience aren't transferable, but even as a non-American I've heard that the IRS is very inclined to be helpful towards people who are trying to sort out unpaid taxes.
posted by Secret Sparrow at 6:01 AM on September 12, 2018 [1 favorite]
This is going to sound crazy but... call the IRS! They are totally used to people procrastinating about paying their taxes. They just want you to pay the money and they can get you copies of your old W-2s.
Nth!!!
I recently had some issues with back taxes owed and put it off because of anxiety. Like you, I was freaking out.
Finally got the courage to deal with it and was so relieved. (That being said, there is no need to kick yourself when you're down and wonder why you didn't do it sooner- once you've done it, that's all that matters.) The IRS has been nothing short of pleasant and helpful. They are not the bogeymen we've all been made out to believe.
They can get you set up with a payment plan so that you don't have to wipe out your savings all at once.
Also, hugs, because everybody needs one, especially when they're stressed like this!
posted by nightrecordings at 6:03 AM on September 12, 2018 [11 favorites]
Nth!!!
I recently had some issues with back taxes owed and put it off because of anxiety. Like you, I was freaking out.
Finally got the courage to deal with it and was so relieved. (That being said, there is no need to kick yourself when you're down and wonder why you didn't do it sooner- once you've done it, that's all that matters.) The IRS has been nothing short of pleasant and helpful. They are not the bogeymen we've all been made out to believe.
They can get you set up with a payment plan so that you don't have to wipe out your savings all at once.
Also, hugs, because everybody needs one, especially when they're stressed like this!
posted by nightrecordings at 6:03 AM on September 12, 2018 [11 favorites]
I got 3 or 4 years behind in filing taxes due to dramatic times leading up to and following divorce. As others have said, contacting the IRS is not scary. They will be very helpful. Also, getting a tax attorney or accountant is a good start.
But I just want to add this bit of advice no matter what direction you go: don't be a perfectionist! Sounds like bad advice when you're dealing with taxes and math, but here's why I say that: One reason I kept putting off the taxes was misplaced perfectionism. If I couldn't do it right, and I didn't have all the information I needed, then I didn't want to file "wrong" taxes. I was convinced I would end up in huge trouble if I missed something. It sounds like you are in that kind of cycle.
I was fortunate that I had a friend who was a tax attorney. We sat down together and filled out the forms based on the information I had. There were numerous entries where he just said "Well, what's your best guess?" He saw I was a little freaked out by not having the "right" numbers and said something like, "They aren't going to audit you and demand a receipt for every penny you deduct. You are making a good faith effort, and that's what matters. If by some fluke they decide to audit you, the worst that will happen is you might owe a little more money. You are not going to jail for fraud or tax evasion, so relax."
Obviously, I am not your lawyer, and he is not your lawyer. But he was right. I owed several thousand dollars but made payment arrangements and it was all much less painful than my catastrophizing brain thought it would be.
Good luck! I know it's stressful, and you might have a few lean years getting caught up, but then it will be done. Best to tackle it now and get it over with sooner. You'll be fine!
posted by The Deej at 6:59 AM on September 12, 2018 [13 favorites]
But I just want to add this bit of advice no matter what direction you go: don't be a perfectionist! Sounds like bad advice when you're dealing with taxes and math, but here's why I say that: One reason I kept putting off the taxes was misplaced perfectionism. If I couldn't do it right, and I didn't have all the information I needed, then I didn't want to file "wrong" taxes. I was convinced I would end up in huge trouble if I missed something. It sounds like you are in that kind of cycle.
I was fortunate that I had a friend who was a tax attorney. We sat down together and filled out the forms based on the information I had. There were numerous entries where he just said "Well, what's your best guess?" He saw I was a little freaked out by not having the "right" numbers and said something like, "They aren't going to audit you and demand a receipt for every penny you deduct. You are making a good faith effort, and that's what matters. If by some fluke they decide to audit you, the worst that will happen is you might owe a little more money. You are not going to jail for fraud or tax evasion, so relax."
Obviously, I am not your lawyer, and he is not your lawyer. But he was right. I owed several thousand dollars but made payment arrangements and it was all much less painful than my catastrophizing brain thought it would be.
Good luck! I know it's stressful, and you might have a few lean years getting caught up, but then it will be done. Best to tackle it now and get it over with sooner. You'll be fine!
posted by The Deej at 6:59 AM on September 12, 2018 [13 favorites]
I went through this in my late 20s, almost exactly the same combo of freelance work, missing paperwork, laziness, fear, led me to not do taxes for a good number of years.
Just call a tax attorney. First of all, they do all the work tracking stuff down; they might ask you what you have, but they can find everything. So its not like a lot of work on your end.
Also, if you end up owing a ka-jillion dollars, you don't HAVE to then proceed with paying back the IRS. Your attorney won't rat you out to the IRS.
All I can say is - I had to pay some money back, but it was simple. I signed some tax returns, cut a check, and it a HUGE relief for me. And I've done my taxes since and its fine.
posted by RajahKing at 8:11 AM on September 12, 2018 [3 favorites]
Just call a tax attorney. First of all, they do all the work tracking stuff down; they might ask you what you have, but they can find everything. So its not like a lot of work on your end.
Also, if you end up owing a ka-jillion dollars, you don't HAVE to then proceed with paying back the IRS. Your attorney won't rat you out to the IRS.
All I can say is - I had to pay some money back, but it was simple. I signed some tax returns, cut a check, and it a HUGE relief for me. And I've done my taxes since and its fine.
posted by RajahKing at 8:11 AM on September 12, 2018 [3 favorites]
Even if you get bad news, it will be better than not knowing. Can you make a deal with your most trusted friend to tell them this and ask them to help you make the appointment, go to the appointment (come along if you want or just make sure you get there) and then deal with the fallout? Sometimes having another person to support but push you can help you face the music.
posted by soelo at 8:21 AM on September 12, 2018 [1 favorite]
posted by soelo at 8:21 AM on September 12, 2018 [1 favorite]
Nth, Nth, Nth.
Take care of this as soon as possible, and before December. This is the slowest time of year. Don't even think about bringing this to an accountant during February-May.
I work for a CPA in North County San Diego. We've handled this before. Memail me if you want more information (location, pricing, process) or if you want me to put you in contact with my boss for a consultation. He isn't a tax attorney but I can ask if he has a recommendation for one.
posted by meemzi at 8:23 AM on September 12, 2018 [3 favorites]
Take care of this as soon as possible, and before December. This is the slowest time of year. Don't even think about bringing this to an accountant during February-May.
I work for a CPA in North County San Diego. We've handled this before. Memail me if you want more information (location, pricing, process) or if you want me to put you in contact with my boss for a consultation. He isn't a tax attorney but I can ask if he has a recommendation for one.
posted by meemzi at 8:23 AM on September 12, 2018 [3 favorites]
My late friend was a CPA+lawyer, and he had tons of clients with problems like (or worse than!) yours. He was a cheerful guy, because he knew there is a process, and once you work up the courage to start it, the IRS will sort of carry you along like a river.
As in most things in life, it's scarier to have looming over you than it is to get through it, once you start.
Write out some notes, so you have the dates and dollars and other details. Then look at it: see, the problem isn't infinite! Now put those in order chronologically, so you have a story you can tell to a tax attorney. Look at it again: see, this story has an arc, and you are not in jail at the end of it. Now get recommendations from your network for a tax attorney (for all anyone knows, you need to plan an estate, or something harmless), then call them and ask for an initial appointment. The tax attorney won't judge you, they'll help you.
You can do this.
posted by wenestvedt at 8:29 AM on September 12, 2018 [1 favorite]
As in most things in life, it's scarier to have looming over you than it is to get through it, once you start.
Write out some notes, so you have the dates and dollars and other details. Then look at it: see, the problem isn't infinite! Now put those in order chronologically, so you have a story you can tell to a tax attorney. Look at it again: see, this story has an arc, and you are not in jail at the end of it. Now get recommendations from your network for a tax attorney (for all anyone knows, you need to plan an estate, or something harmless), then call them and ask for an initial appointment. The tax attorney won't judge you, they'll help you.
You can do this.
posted by wenestvedt at 8:29 AM on September 12, 2018 [1 favorite]
Your tax issues are likely not complex, but need hand-holding, patience, thoroughness. Ask around and find a competent friendly accountant and let them help you sort it out. This is much less uncommon than you think. I have let several years go by without filing and catching up is so much worse than doing it promptly. Do ask the IRS for help, as well. The one concrete step you can take is to gather up all the tax info you can find. This is manageable. Good luck.
posted by theora55 at 9:55 AM on September 12, 2018 [1 favorite]
posted by theora55 at 9:55 AM on September 12, 2018 [1 favorite]
I've been through this and I can confirm: not knowing feels way worse than taking action.
What I did: first I asked my freelancer friends to recommend an accountant, so I got someone both affordable and used to these situations. The guy came to my house and I just handed every paper I had in a box. He was able to tell me what documents were missing and where to find them, asked me a few more questions, and then a few days later it was just gloriously *done*. Then I called the revenue service and worked out a reasonable payment plan. Now I'm free, and I hope you get to feel that awesome feeling soon.
posted by Freyja at 12:56 PM on September 12, 2018 [2 favorites]
What I did: first I asked my freelancer friends to recommend an accountant, so I got someone both affordable and used to these situations. The guy came to my house and I just handed every paper I had in a box. He was able to tell me what documents were missing and where to find them, asked me a few more questions, and then a few days later it was just gloriously *done*. Then I called the revenue service and worked out a reasonable payment plan. Now I'm free, and I hope you get to feel that awesome feeling soon.
posted by Freyja at 12:56 PM on September 12, 2018 [2 favorites]
I am going through this right now. A friend of mine has been gently pestering me for months and I finally went the CPA that he found for me last month. I was totally freaked out about years of back taxes and and lack of having all of the necessary paperwork. This accountant does nothing but file back taxes for people. This is what he told me:
The average number of years that the people who come to me have not filed is 10 years, the worst I've had to deal with is 50.
The IRS has your W2's and anything other info that has been reported to them about you, we will call and talk to them for you (I was really not looking forward to calling my old company to ask them if they would take time out of their day to dig back through their archives and send me yet another copy of my old W2's because I'm a total procrastinating loser who can't manage her own life, turns out I won't have to).
You have more documentation than most people, most people have nothing (including the 50 year guy, nothing!).
Just do the best you can, it's not brain surgery, you don't have to be perfect.
The IRS just wants you to start filing and paying your taxes and will work with you to get you to do that.
Find a tax person you feel comfortable with, you don't have to go with the first one, I didn't. Many of them will give you a free initial consultation, take advantage of that and don't guilt trip yourself into feeling that you're wasting their time, it's just another part of their job.
Good luck, you can do this.
posted by BoscosMom at 2:35 PM on September 12, 2018 [6 favorites]
The average number of years that the people who come to me have not filed is 10 years, the worst I've had to deal with is 50.
The IRS has your W2's and anything other info that has been reported to them about you, we will call and talk to them for you (I was really not looking forward to calling my old company to ask them if they would take time out of their day to dig back through their archives and send me yet another copy of my old W2's because I'm a total procrastinating loser who can't manage her own life, turns out I won't have to).
You have more documentation than most people, most people have nothing (including the 50 year guy, nothing!).
Just do the best you can, it's not brain surgery, you don't have to be perfect.
The IRS just wants you to start filing and paying your taxes and will work with you to get you to do that.
Find a tax person you feel comfortable with, you don't have to go with the first one, I didn't. Many of them will give you a free initial consultation, take advantage of that and don't guilt trip yourself into feeling that you're wasting their time, it's just another part of their job.
Good luck, you can do this.
posted by BoscosMom at 2:35 PM on September 12, 2018 [6 favorites]
It's going to cost to have someone look over your finances, but I'd trust the accountants that your friends recommend over any corporation that advertises intermediation with the IRS. They usually make their money from financing the tax debt. You won't get a good rate.
Calling the IRS is free, and can help you get the ball rolling. Maybe start there, document everything they say you need, then contact an accountant to help you sort it all out? At least you'll have a scope of the issue before involving someone who bills hourly.
posted by domo at 7:18 AM on September 13, 2018
Calling the IRS is free, and can help you get the ball rolling. Maybe start there, document everything they say you need, then contact an accountant to help you sort it all out? At least you'll have a scope of the issue before involving someone who bills hourly.
posted by domo at 7:18 AM on September 13, 2018
The IRS is not a bank trying to take over your house - they do not want you to be destitute while you pay them! They garnish high levels of wages based on their calculations only if you haven't spoken to them; once you contact them, they're happy to work towards "this is what I can afford and continue to have a roof over my head and eat things other than ramen."
The agent you talk to does not care how much you pay; he's not getting a commission. And the IRS as a whole doesn't actually care how much you pay; they care that the books start to balance and their records from multiple directions line up correctly. Once you're in the "has payment plan" category, they're happy to ignore you.
Again: Not a bank. Not making their money based on how much you pay in. (Especially if your income is under a million dollars a year.) They're not trying to find the highest possible payment level that allows you to keep making payments. They want you to be paid off eventually, but they sometimes offer very generous plans toward that.
posted by ErisLordFreedom at 9:53 AM on September 13, 2018 [3 favorites]
The agent you talk to does not care how much you pay; he's not getting a commission. And the IRS as a whole doesn't actually care how much you pay; they care that the books start to balance and their records from multiple directions line up correctly. Once you're in the "has payment plan" category, they're happy to ignore you.
Again: Not a bank. Not making their money based on how much you pay in. (Especially if your income is under a million dollars a year.) They're not trying to find the highest possible payment level that allows you to keep making payments. They want you to be paid off eventually, but they sometimes offer very generous plans toward that.
posted by ErisLordFreedom at 9:53 AM on September 13, 2018 [3 favorites]
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You can right this ship, but doing it alone without paying a consultant will be time intensive and potentially risky. I'd start here for an itemized plan of attack.
Instead of a run of the mill accountant, I'd consider looking at tax attorneys first, especially ones that specialize in this class of tax evasion. There's probably a couple in your state.
Good luck.
posted by enfa at 4:44 AM on September 12, 2018 [4 favorites]