Between death and taxes, I'm less scared of death.
May 22, 2007 12:21 PM Subscribe
Taxes. Apparently I owe them. A lot of them. About $40,000 more than I have. And the story gets worse.
Last year at this time I had $35,000 in my savings & my life was going impressively -- on the surface. Emotionally, that's a different story. I was depressed. I am self-employed and I moved to a new area to take a well-paying consultant job but I felt myself going through a lonely identity crisis in my new town. I lost my spirit, pretty much. I finally quit my job in January with hopes of becoming happier, working hard on building a better life in this new place, and fixing my problems, including tackling a back tax problem I knew I had but had been avoiding facing (a great source of self loathing for me). Thing is... I knew it was bad, but I had absolutely no idea how bad that tax problem was. I was completely clueless.
Right as I started looking for a new job the IRS took everything I had in the bank. EVERYTHING. I woke up one day and my accounts were empty. No rent money. No nothing. And apparently they say I owe about $40,000 more. That I don't have.
I frantically met with a tax accountant and tried to start sorting through things. But now I'm in over my head. The main reason I put off dealing with this in the first place is that I'm an artsy type without a single left brain skill. Just sorting through invoices & signing tax forms very literally makes me cry. So, the accountant told me that I have to file 2006 and then he can negotiate the rest of it. Thing is, because the IRS took every dime I had, I can't even afford to pay him for that or his $300/hr. negotiating fee. When I merely think about all of this stuff I start crying and my back gives out. It paralyzes me.
I have been working hard since I was 14, so I've never been the lazy type & it astounds me that I'm struggling like this at 40. Why would I do that to myself? I have NO CLUE. I finally got out of debt a few years ago other than this tax issue and I was very proud of myself. I thought I was doing good. I made $90,000 last year. But now I'm living off my credit cards again, with little income coming in. In the last few months I've barely made enough to cover my living expenses -- I actually have started to cut down on buying food & trying to remember how I lived in college. Despite my creative executive background (I managed a department in a Fortune 500 company, for chrissakes!) I've even been considering getting a night waitressing job for the first time in 15 years. Even though one night of waitressing would probably pay me what 1 hour of my normal job would, I'm just feeling that desperate.
I am looking for good work but I'm in a new city so I don't have the contacts I used to, nor the insights into the place & people. It doesn't help that my confidence is low because of this tax thing and I know it. I am in shock that I've let myself f*ck up so badly, and I'm in this place completely by myself. Everyone around me thinks I'm this successful, accomplished person and I feel like I should've done better and not caused these problems for myself. But I have so now I have to fix them. And I'm in it alone, pretty much. Unlike other people I know, nobody else fixes my problems & I don't expect them to. So I'm just trying to do my best to get it over with... although I'm not sure how.
Has anyone else had the IRS take over their lives? How did you get to the other side of it? How long did it take? Any tips on how to do this?
Last year at this time I had $35,000 in my savings & my life was going impressively -- on the surface. Emotionally, that's a different story. I was depressed. I am self-employed and I moved to a new area to take a well-paying consultant job but I felt myself going through a lonely identity crisis in my new town. I lost my spirit, pretty much. I finally quit my job in January with hopes of becoming happier, working hard on building a better life in this new place, and fixing my problems, including tackling a back tax problem I knew I had but had been avoiding facing (a great source of self loathing for me). Thing is... I knew it was bad, but I had absolutely no idea how bad that tax problem was. I was completely clueless.
Right as I started looking for a new job the IRS took everything I had in the bank. EVERYTHING. I woke up one day and my accounts were empty. No rent money. No nothing. And apparently they say I owe about $40,000 more. That I don't have.
I frantically met with a tax accountant and tried to start sorting through things. But now I'm in over my head. The main reason I put off dealing with this in the first place is that I'm an artsy type without a single left brain skill. Just sorting through invoices & signing tax forms very literally makes me cry. So, the accountant told me that I have to file 2006 and then he can negotiate the rest of it. Thing is, because the IRS took every dime I had, I can't even afford to pay him for that or his $300/hr. negotiating fee. When I merely think about all of this stuff I start crying and my back gives out. It paralyzes me.
I have been working hard since I was 14, so I've never been the lazy type & it astounds me that I'm struggling like this at 40. Why would I do that to myself? I have NO CLUE. I finally got out of debt a few years ago other than this tax issue and I was very proud of myself. I thought I was doing good. I made $90,000 last year. But now I'm living off my credit cards again, with little income coming in. In the last few months I've barely made enough to cover my living expenses -- I actually have started to cut down on buying food & trying to remember how I lived in college. Despite my creative executive background (I managed a department in a Fortune 500 company, for chrissakes!) I've even been considering getting a night waitressing job for the first time in 15 years. Even though one night of waitressing would probably pay me what 1 hour of my normal job would, I'm just feeling that desperate.
I am looking for good work but I'm in a new city so I don't have the contacts I used to, nor the insights into the place & people. It doesn't help that my confidence is low because of this tax thing and I know it. I am in shock that I've let myself f*ck up so badly, and I'm in this place completely by myself. Everyone around me thinks I'm this successful, accomplished person and I feel like I should've done better and not caused these problems for myself. But I have so now I have to fix them. And I'm in it alone, pretty much. Unlike other people I know, nobody else fixes my problems & I don't expect them to. So I'm just trying to do my best to get it over with... although I'm not sure how.
Has anyone else had the IRS take over their lives? How did you get to the other side of it? How long did it take? Any tips on how to do this?
Go to a doctor. Perhaps they will give you a note to say you are depressed and unable to manage this right now. That probably won't stop the interest, but it may buy you a few weeks to get things together. Go see a therapist, then head back to to the tax specialist.
posted by acoutu at 12:43 PM on May 22, 2007
posted by acoutu at 12:43 PM on May 22, 2007
Anonymous, you're not alone. If you want to commiserate -- my email's in the profile.
posted by SpecialK at 12:46 PM on May 22, 2007
posted by SpecialK at 12:46 PM on May 22, 2007
You quit your $90k a year job but you haven't gone back to it, or to a similar one? Because that is how it sounds. So, my first piece of advice is to go back to your $90k a year consulting job, even if you disliked it. Money seems to be the number 1 priority right now; work on happiness at your job once the taxes are sorted out.
The IRS will not take every penny you earn, rather they will garnish your wages until you have paid back the taxes you avoided paying before. Indeed, the IRS would not have one day completely emptied your accounts without informing you prior. That's not how it works. If you can't afford your accountant, don't pay her. You don't need an expensive accountant to do this. Call up the IRS.
Clearly you have the skills and talent to earn decent money, so there is no need to go back to waitressing. If you managed a Fortune 500 company's department, you can manage to figure this out.
posted by modernnomad at 1:03 PM on May 22, 2007
The IRS will not take every penny you earn, rather they will garnish your wages until you have paid back the taxes you avoided paying before. Indeed, the IRS would not have one day completely emptied your accounts without informing you prior. That's not how it works. If you can't afford your accountant, don't pay her. You don't need an expensive accountant to do this. Call up the IRS.
Clearly you have the skills and talent to earn decent money, so there is no need to go back to waitressing. If you managed a Fortune 500 company's department, you can manage to figure this out.
posted by modernnomad at 1:03 PM on May 22, 2007
1) I feel your dread. The only escape is to face the problem.
2) Get an accountant. Mine have never required payment until months after the accounts have been settled. Settle your account with the IRS first perhaps by setting up a payment schedule, then worry about how to pay the accountant.
3) It can take a few months or even a year for your accountant and the IRS to work out what you actually owe and how you are going to pay it. However, it is very possible that at this point they will end up owing you money because the IRS always calculate the worst possible liability.
4) If your tax situation remains complicated, you will continue to have interaction with the IRS..forever. They never go away and will continue to send you threatening letters even when you and your accounted have gone to extreme effort to get your accounts straightened out. What you do is forward IRS documents (and threats) to your accountant to deal with and chalk it up to the cost of doing business. If the cost of doing business is too high, then your business is not profitable and you need a new business.
posted by Osmanthus at 1:19 PM on May 22, 2007
2) Get an accountant. Mine have never required payment until months after the accounts have been settled. Settle your account with the IRS first perhaps by setting up a payment schedule, then worry about how to pay the accountant.
3) It can take a few months or even a year for your accountant and the IRS to work out what you actually owe and how you are going to pay it. However, it is very possible that at this point they will end up owing you money because the IRS always calculate the worst possible liability.
4) If your tax situation remains complicated, you will continue to have interaction with the IRS..forever. They never go away and will continue to send you threatening letters even when you and your accounted have gone to extreme effort to get your accounts straightened out. What you do is forward IRS documents (and threats) to your accountant to deal with and chalk it up to the cost of doing business. If the cost of doing business is too high, then your business is not profitable and you need a new business.
posted by Osmanthus at 1:19 PM on May 22, 2007
Reading modernomad's post I have to respond.
First off, the IRS will absolutely empty your accounts. They will only garnish your wages if you don't have enough in your account to pay or you agree to a payment plan. They wont do it without notifying you and giving you a chance, but this person ignored those warnings; or possibly never even read them because letters from the IRS go under the couch :P
Secondly, calling the IRS will usually accomplish nothing. They are a many-headed beauracratic hydra and you'll never talk to the same person twice. When dealing with the IRS for serious matters, you and your account should go down the local IRS branch and talk the people there in person. [probalby first come first serve monday 7am] You will get much better service and be able to form a real business relationship with your interface to the IRS.
posted by Osmanthus at 1:29 PM on May 22, 2007
First off, the IRS will absolutely empty your accounts. They will only garnish your wages if you don't have enough in your account to pay or you agree to a payment plan. They wont do it without notifying you and giving you a chance, but this person ignored those warnings; or possibly never even read them because letters from the IRS go under the couch :P
Secondly, calling the IRS will usually accomplish nothing. They are a many-headed beauracratic hydra and you'll never talk to the same person twice. When dealing with the IRS for serious matters, you and your account should go down the local IRS branch and talk the people there in person. [probalby first come first serve monday 7am] You will get much better service and be able to form a real business relationship with your interface to the IRS.
posted by Osmanthus at 1:29 PM on May 22, 2007
Not only will the IRS empty your accounts . . .
When I was 17, I got my first job. I went to my small town bank branch and opened an account. I wanted a debit card - relatively new at the time! My parents had to "co-sign" for me (as the bank manager put it - what was actually happening was that the account was in their name with me as an authorized user). I thought nothing of it.
The only money going into that account was a direct deposit from my job. I had the only ATM card for the account. When I left for college, I had more than $2000 in it. I had no idea my dad had tax issues. When I returned, the account was frozen/emptied. The IRS took every penny.
I confirmed this, as I thought maybe my dad withdrew it. Nope. I fought and fought and fought with the IRS. Never got a dime of my money back. Over the years, my dad has paid me back and then some.
This is one of those "can't let it go" scenarios that I try so hard to forget, but everytime I think of it, I can feel my heart seize up a little.
posted by peep at 1:58 PM on May 22, 2007
When I was 17, I got my first job. I went to my small town bank branch and opened an account. I wanted a debit card - relatively new at the time! My parents had to "co-sign" for me (as the bank manager put it - what was actually happening was that the account was in their name with me as an authorized user). I thought nothing of it.
The only money going into that account was a direct deposit from my job. I had the only ATM card for the account. When I left for college, I had more than $2000 in it. I had no idea my dad had tax issues. When I returned, the account was frozen/emptied. The IRS took every penny.
I confirmed this, as I thought maybe my dad withdrew it. Nope. I fought and fought and fought with the IRS. Never got a dime of my money back. Over the years, my dad has paid me back and then some.
This is one of those "can't let it go" scenarios that I try so hard to forget, but everytime I think of it, I can feel my heart seize up a little.
posted by peep at 1:58 PM on May 22, 2007
Accountants are all well and good, but it sounds like you could use a lawyer instead. Exception: did your accountant use the words "offer and compromise?" Any tax lawyer will help you work one out, some accounts will also.
Right now you need an offer and compromise. This is how you prevent them from taking everything. It's basically a contract between you and the IRS, or you and the DOJ tax division if they have a default judgment against you. The contract says something like "I owe the IRS $40,000. I will take a loan/borrow from my sister/whatever and pay the IRS a lump sum of $35,000 before two weeks are up;" or "I owe the IRS $40,000. I agree to pay the IRS $500/month until the debt is repaid, provided the IRS cancel all interest accrued to this point and waive any future interest." This will most likely require you letting someone else help you fix your problem, but you usually (though not always!) get a break by offering to pay a lump sum or by being cooperative. Remember, owing money to a family member is better than owing money to a bank is better than owing money to the IRS.
To help you and your attorney/accountant do this, start keeping a detailed budget. The IRS will want to know how you are spending your money. Get a job. Any job. You need the income. Finally, think of anyone who might lend you money, even if they're your half-brother that you kind of hate and haven't talked to in years. You may have to swallow a good bit of pride to get this out of the way.
posted by ohio at 2:03 PM on May 22, 2007
Right now you need an offer and compromise. This is how you prevent them from taking everything. It's basically a contract between you and the IRS, or you and the DOJ tax division if they have a default judgment against you. The contract says something like "I owe the IRS $40,000. I will take a loan/borrow from my sister/whatever and pay the IRS a lump sum of $35,000 before two weeks are up;" or "I owe the IRS $40,000. I agree to pay the IRS $500/month until the debt is repaid, provided the IRS cancel all interest accrued to this point and waive any future interest." This will most likely require you letting someone else help you fix your problem, but you usually (though not always!) get a break by offering to pay a lump sum or by being cooperative. Remember, owing money to a family member is better than owing money to a bank is better than owing money to the IRS.
To help you and your attorney/accountant do this, start keeping a detailed budget. The IRS will want to know how you are spending your money. Get a job. Any job. You need the income. Finally, think of anyone who might lend you money, even if they're your half-brother that you kind of hate and haven't talked to in years. You may have to swallow a good bit of pride to get this out of the way.
posted by ohio at 2:03 PM on May 22, 2007
I have IRS-phobia too, but through recent negotiations (over the phone, despite what Osmanthus says) they have actually been reasonable and helpful in letting/helping me make payment arrangments. Granted, my problems were less than yours, so getting a good tax lawyer will be more useful to you, but just wanted to say that the IRS is not entirely a cold automaton, and you _can_ work out things to make your life bearable, IF YOU ACTUALLY DO IT.
I put it off way too long because I couldn't face it -- now that it's done and working, I feel better. You can too.
posted by anadem at 2:25 PM on May 22, 2007
I put it off way too long because I couldn't face it -- now that it's done and working, I feel better. You can too.
posted by anadem at 2:25 PM on May 22, 2007
You can absolutely deal with the IRS. Your accountant should work out a payment plan with you and if he/she doesn't then you can still call the IRS yourself and work out a payment plan. The IRS will work with you, but if you ignore them they can be quite punitive, thus the seizing of your bank account. The main thing is to take action as soon as you can do so. You also need to be good to yourself as much as possible, if you think talking to a counselor could help then I suggest you do so, there are sliding scale and free counseling programs available in many different places.
The terrible overwhelming sense of disaster will start to abate almost as soon as you start dealing with the problem, I promise you.
posted by Divine_Wino at 5:02 PM on May 22, 2007
The terrible overwhelming sense of disaster will start to abate almost as soon as you start dealing with the problem, I promise you.
posted by Divine_Wino at 5:02 PM on May 22, 2007
Your accountant should work out a payment plan with you and if he/she doesn't then you can still call the IRS yourself and work out a payment plan.
When I say that what I mean is that your accountant might be willing to give you payment terms to help you with the IRS and if not you can call yourself and work it out. It's the only way to solve the problem and it will help, get a friend to sit with you while you do it if that will help.
posted by Divine_Wino at 5:05 PM on May 22, 2007
When I say that what I mean is that your accountant might be willing to give you payment terms to help you with the IRS and if not you can call yourself and work it out. It's the only way to solve the problem and it will help, get a friend to sit with you while you do it if that will help.
posted by Divine_Wino at 5:05 PM on May 22, 2007
Nthing everyone else - you will feel a huge crushing weight lift off of you if you contact the IRS and make payment arrangements. I ended up going in person to a local office because the guy on the phone I tried to talk to was a meathead, but YMMV. I was able to make payment arrangements and they in turn knocked off some of the interest and penalty that had racked up. It took years to pay it off, but as long as you stick to your promise and payment schedule, they'll leave you alone. (But be late with just one payment, buddy, and you'll have to start all over from square one.) Good luck!
posted by Oriole Adams at 5:16 PM on May 22, 2007
posted by Oriole Adams at 5:16 PM on May 22, 2007
The "new and user friendly" IRS of the 00s is, indeed, a different monster than what one could expect in the 80s and 90s. Much more mellow, much more eager to help you get things straightened out. They WILL work with you to sort out your debt and you CAN make payment arrangements with them.
A good accountant should be able to get your taxes down LOWER than what you are bracing yourself for. And then you'll make payments and then life will go on.
The recommendation for a therapist and maybe some anti-anxiety meds is a good bit of advice, too. Do it.
Only bummer: That money they slurped out of your account. Don't expect to see any of that back. They may allude to this, to get your ass in gear to start dealing with them, but chances are that money has already been absorbed into the debt you have with them.
posted by zenpop at 5:24 PM on May 22, 2007
A good accountant should be able to get your taxes down LOWER than what you are bracing yourself for. And then you'll make payments and then life will go on.
The recommendation for a therapist and maybe some anti-anxiety meds is a good bit of advice, too. Do it.
Only bummer: That money they slurped out of your account. Don't expect to see any of that back. They may allude to this, to get your ass in gear to start dealing with them, but chances are that money has already been absorbed into the debt you have with them.
posted by zenpop at 5:24 PM on May 22, 2007
Disclaimer: I am not your lawyer and this is not legal advice. As others have suggested, you need to work with a professional who knows all the facts of your situation. Or, if this isn't an option due to your financial situation, you should do some research on your own and deal with the IRS directly. Please don't take anything I say as authoritative, even though my username has the word legal in it.
Here are some of your options:
* If you can show that you really can't pay your debts right now, you may be able to get the IRS to assign your debt Currently Noncollectible Status. Interest and penalties will continue to accrue, but at least you'll have some breathing room, which you can use to take control of your finances.
* It may make sense for you to file a Chapter 7 bankruptcy petition. Depending on a variety of factors, you may be able to get at least some of your tax debts discharged. If you want to explore this option, I strongly advise you to consult with a professional--filing at the right time is very important. Also, the consequences of filing a bankruptcy petition may be unacceptable to you.
* A Chapter 13 bankruptcy could help you set up a payment plan you can deal with. See above on the need to talk to a professional about bankruptcy.
* You can negotiate a payment plan directly with the IRS, as others have mentioned.
* You can, as others have mentioned, file IRS Form 656, Offer in Compromise. You would likely be asserting Doubt as to Collectibility--that is, you'd be telling them you can't pay the full debt and asking them to settle it for less than what you owe.
* If a lot of your tax debt comes from penalties, you can try to get those penalties canceled. The IRS's collection of penalties is discretionary. If you can show "reasonable cause" for your failure to pay your taxes in previous years, you may be to get an abatement (cancellation) of the resulting penalties. Medical issues, including psychiatric ones, can be relevant here, so I second the advice to see a doctor.
Based on your description of your situation, I think you may also be a good candidate for the assistance of the Taxpayer Advocate Service, an independent organization within the IRS that helps taxpayers resolve problems. You can call them directly and explain the hardships you are facing, or you can submit a Form 911. Because you are feeling so overwhelmed right now, and because you're worried about your ability to pay for professional help, I strongly suggest you look into this as soon as possible. If you qualify for their help, they should let you know very quickly. Working with them may be what you need to start pulling yourself out of this morass.
Also, I second the idea that this is likely a symptom of some underlying issue. You're probably focused on fixing your financial problems right now, which is understandable. But you will get through this, and when you've put out this fire, I hope you're able to start working on that underlying issue so that the rest of your life can be less stressful and more joyful.
posted by barelylegalrealist at 7:01 PM on May 22, 2007 [2 favorites]
Here are some of your options:
* If you can show that you really can't pay your debts right now, you may be able to get the IRS to assign your debt Currently Noncollectible Status. Interest and penalties will continue to accrue, but at least you'll have some breathing room, which you can use to take control of your finances.
* It may make sense for you to file a Chapter 7 bankruptcy petition. Depending on a variety of factors, you may be able to get at least some of your tax debts discharged. If you want to explore this option, I strongly advise you to consult with a professional--filing at the right time is very important. Also, the consequences of filing a bankruptcy petition may be unacceptable to you.
* A Chapter 13 bankruptcy could help you set up a payment plan you can deal with. See above on the need to talk to a professional about bankruptcy.
* You can negotiate a payment plan directly with the IRS, as others have mentioned.
* You can, as others have mentioned, file IRS Form 656, Offer in Compromise. You would likely be asserting Doubt as to Collectibility--that is, you'd be telling them you can't pay the full debt and asking them to settle it for less than what you owe.
* If a lot of your tax debt comes from penalties, you can try to get those penalties canceled. The IRS's collection of penalties is discretionary. If you can show "reasonable cause" for your failure to pay your taxes in previous years, you may be to get an abatement (cancellation) of the resulting penalties. Medical issues, including psychiatric ones, can be relevant here, so I second the advice to see a doctor.
Based on your description of your situation, I think you may also be a good candidate for the assistance of the Taxpayer Advocate Service, an independent organization within the IRS that helps taxpayers resolve problems. You can call them directly and explain the hardships you are facing, or you can submit a Form 911. Because you are feeling so overwhelmed right now, and because you're worried about your ability to pay for professional help, I strongly suggest you look into this as soon as possible. If you qualify for their help, they should let you know very quickly. Working with them may be what you need to start pulling yourself out of this morass.
Also, I second the idea that this is likely a symptom of some underlying issue. You're probably focused on fixing your financial problems right now, which is understandable. But you will get through this, and when you've put out this fire, I hope you're able to start working on that underlying issue so that the rest of your life can be less stressful and more joyful.
posted by barelylegalrealist at 7:01 PM on May 22, 2007 [2 favorites]
IANACPA, but I've seen clients come into the accounting office I work at with 7 or 8 years of unfiled taxes and had it turn out that they owed the IRS a lot less than the IRS thought they did. Where you get in trouble is if you've got a lot of 1099 income with no estimated tax payments, large capital gains, etc... if you work with W2 income, and don't max out your exemptions your bills are usually not as high. An accountant is the right place to start, and if they are good, they will know when they need to refer you to an attorney. Ask how much experience they have with offers in compromise.
The big problem here that no one is touching is that if the IRS is right, and you do owe that much money it means you've been living beyond your means for years. Unless your accountant says the IRS estimate of what you owe is off, it is essential for you to reduce your expenses drastically. I know you've started with food, but have you looked at your rent? Can you get a consolidation loan or line of credit to reduce the interest on your credit cards (be careful about putting money in the bank though)? Can you drop your car insurance premiums by raising the deductible? I wish I had better resources for credit counseling, but maybe you should open a separate AskMe on that.
Good luck, I'm confident you can get through it. Oh, and I've seen smart people from all walks of life who have trouble thinking about money and taxes, and get into trouble. It's not something you should beat yourself up over.
posted by BrotherCaine at 9:37 PM on May 22, 2007
The big problem here that no one is touching is that if the IRS is right, and you do owe that much money it means you've been living beyond your means for years. Unless your accountant says the IRS estimate of what you owe is off, it is essential for you to reduce your expenses drastically. I know you've started with food, but have you looked at your rent? Can you get a consolidation loan or line of credit to reduce the interest on your credit cards (be careful about putting money in the bank though)? Can you drop your car insurance premiums by raising the deductible? I wish I had better resources for credit counseling, but maybe you should open a separate AskMe on that.
Good luck, I'm confident you can get through it. Oh, and I've seen smart people from all walks of life who have trouble thinking about money and taxes, and get into trouble. It's not something you should beat yourself up over.
posted by BrotherCaine at 9:37 PM on May 22, 2007
BrotherCaine has a good point about filing the returns for previous years.
I'm especially interested in your mention that you were a consultant. Were you self-employed? If you were self-employed, there are dozens and dozens of business expenses that you could claim to reduce your tax liability. Such expenses generally aren't reported to the IRS, which means they wouldn't have taken them into account when figuring what you owe. If you file a return bringing those expenses to the IRS's attention, it could do a lot to improve your situation.
(FWIW, there's sometimes a time horizon for getting money back from the IRS. As I understand it, you can definitely get back any money you're entitled to for the past three years; for years prior to that, it may be more complicated.)
Long story short, if you were self-employed and had significant business expenses — especially in the past few years — then you should definitely see an accountant.
posted by nebulawindphone at 4:21 PM on May 23, 2007
I'm especially interested in your mention that you were a consultant. Were you self-employed? If you were self-employed, there are dozens and dozens of business expenses that you could claim to reduce your tax liability. Such expenses generally aren't reported to the IRS, which means they wouldn't have taken them into account when figuring what you owe. If you file a return bringing those expenses to the IRS's attention, it could do a lot to improve your situation.
(FWIW, there's sometimes a time horizon for getting money back from the IRS. As I understand it, you can definitely get back any money you're entitled to for the past three years; for years prior to that, it may be more complicated.)
Long story short, if you were self-employed and had significant business expenses — especially in the past few years — then you should definitely see an accountant.
posted by nebulawindphone at 4:21 PM on May 23, 2007
1) I would use a professional, someone experienced in tax controversy work, not just tax work. It sounds like you've got over 100k in back taxes at issue here, and it may be worthwhile to contact these guys. Fink is an expert in tax controversy, has an excellent litigation record, and teaches at NYU Law, first in the country for taxation work. At least they could refer you to someone. Maybe they'll work pro bono or contingency even - who knows. Email's in the profile if you want a personal recommendation to them - I took a course with him this past semester.
2) IF you decide not to do that, think about contacting the taxpayer ombudsman. The office is there to investigate improper procedure and taxpayer hardship. If you use a professional, do NOT talk to any government officials without their advice & consent.
posted by lorrer at 8:37 AM on May 24, 2007
2) IF you decide not to do that, think about contacting the taxpayer ombudsman. The office is there to investigate improper procedure and taxpayer hardship. If you use a professional, do NOT talk to any government officials without their advice & consent.
posted by lorrer at 8:37 AM on May 24, 2007
As an aside, let me give you some unsolicited heard-earned advice about how to prevent this from happening in the future. Freelancing requires financial discipline, and that is not my strong suit either, so you need to protect yourself. Step one, open an ING/EmigrantDirect/etc high interest savings account. Whenever you get a check, deposit 40% or more into this account (I do 50%, so after paying my quarterly estimated taxes, I get sort of a do it yourself refund). Find an accountant who understands your business and tell them what you've done. They'll be able to offer advice about how to minimize your tax exposure via retirement fund instruments and other methods, and they'll take care of your quarterly estimated payments. You can also pay them out of the savings account, so basically, you don't notice any of this money missing.
posted by feloniousmonk at 7:18 PM on May 24, 2007
posted by feloniousmonk at 7:18 PM on May 24, 2007
This thread is closed to new comments.
Also, I know you don't like to ask for help, but sometimes family are the only ones you can turn to in times like this. Do you have a brother, sister, mother, father, anyone that could help you financially, maybe even let you crash for a while at their place? I know you want to start over where you are, but without the ties of employment and contacts, I think you pretty much need to take whatever you can get, wherever you can get it.
posted by misha at 12:38 PM on May 22, 2007