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Ask HN: Owe over $100k US backtaxes. Not sure what to do.

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Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#21

Post by [deleted] »

bad_decisions wrote: post #18
jacquesm wrote: post #4

$100K in back taxes means in income of a low multiple of that. Where did the money go? Did you turn it into assets? If so then you may want to simply sell all or part of what you have. If you did not turn your income into assets but it has all burned up see what you can do in terms of documenting your business related costs over that time. Conditional on the IRS agreeing with all this you could then make them a propo…

I made a multiple of that amount. I thought that the good times would last. They didn't. I am now a salaryman. The installment plan monthly amount due to my high cost location ends up being total after tax dollars minus rent and very frugal and basic living expenses. I could move to a cheaper location (which I am considering), but that doesn't seem to address the more immediate and core problem.

[deleted]

Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#22

Post by pseingatl »

You file an Offer in Compromise. There is a specific form to do this; it is best done with the assistance of a tax accountant or attorney. Even if you leave the United States, the tax bill will keep growing unless you address it. Extradition is not an issue btw, this is a civil matter.

Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#23

Post by temp4009 »

DanielBMarkham wrote: post #15

Similar spot here. Note: be sure you file your taxes. You legally have to file, whether you can pay or not. Once you file, after two years the debt can be part of a bankruptcy, but you have to keep filing. As you know, this is a really sucky spot to be in. I believe the IRS has a program for people who have no chance of repaying -- not sure what the title is. It's worth looking into. You did a brave thing coming onli…

Is there a statute of limitations on not filing? E.g. if you forgot to file a decade ago, and nobody ever came after you, is it better to come clean or let sleeping dogs lie?

Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#24

Post by smartician »

bad_decisions wrote: post #18
jacquesm wrote: post #4

$100K in back taxes means in income of a low multiple of that. Where did the money go? Did you turn it into assets? If so then you may want to simply sell all or part of what you have. If you did not turn your income into assets but it has all burned up see what you can do in terms of documenting your business related costs over that time. Conditional on the IRS agreeing with all this you could then make them a propo…

I made a multiple of that amount. I thought that the good times would last. They didn't. I am now a salaryman. The installment plan monthly amount due to my high cost location ends up being total after tax dollars minus rent and very frugal and basic living expenses. I could move to a cheaper location (which I am considering), but that doesn't seem to address the more immediate and core problem.

> The installment plan monthly amount due to my high cost location ends up being total after tax dollars minus rent and very frugal and basic living expenses

So what's the problem? You are highly in debt, and you worked out a payment plan that will have you pay off your debt in five years.

Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#25

Post by maxerickson »

johnnymonster wrote: post #16
drzaiusapelord wrote: post #13

>but basically the IRS wants all my after tax earnings for 5 years. Typically the IRS can set you up with a payment plan that's a portion of your income. Its time to find a tax lawyer, not a CPA about this. Settlement/compromise, installment plan over a long term, and even bankruptcy are options.

I might get backlash for this advice, but If you are considering bankruptcy, you might want to first consider quitting any job that is providing you income and going on unemployment. Once you have done that for a while, go ahead and take a look at this: http://www.irs.gov/Individuals/Offer-in-Compromise-1 If you are unable to legitimately pay (not working and unable to find work by being on unemployment) you will be…

In the U.S., you can't choose to quit and then go on unemployment.

Also, a (relatively) healthy, single person with no children isn't going to qualify for many other programs.

Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#27

Post by arethuza »

jacquesm wrote: post #4

$100K in back taxes means in income of a low multiple of that. Where did the money go? Did you turn it into assets? If so then you may want to simply sell all or part of what you have. If you did not turn your income into assets but it has all burned up see what you can do in terms of documenting your business related costs over that time. Conditional on the IRS agreeing with all this you could then make them a propo…

I can think of a few scenarios where you could end up with a tax liability with no actual associated "income" in the normal sense - indeed I almost encountered one myself a few years back but dodged it by being suitably stroppy and threatening to pull completely out of the relevant transaction (an IPO on the LSE).

Mind you my experiences are with the UK tax system where you are guilty until proven innocent.

Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#28

Post by erichurkman »

johnnymonster wrote: post #16
drzaiusapelord wrote: post #13

>but basically the IRS wants all my after tax earnings for 5 years. Typically the IRS can set you up with a payment plan that's a portion of your income. Its time to find a tax lawyer, not a CPA about this. Settlement/compromise, installment plan over a long term, and even bankruptcy are options.

I might get backlash for this advice, but If you are considering bankruptcy, you might want to first consider quitting any job that is providing you income and going on unemployment. Once you have done that for a while, go ahead and take a look at this: http://www.irs.gov/Individuals/Offer-in-Compromise-1 If you are unable to legitimately pay (not working and unable to find work by being on unemployment) you will be…

Well, if you quit, you're generally not eligible for unemployment benefits. Make sure you check your state rules.

Re: Ask HN: Owe over $100k US backtaxes. Not sure what to do.

#30

Post by scottlilly »

philiphodgen wrote: post #5

Email me. Contact info in profile. The IRS cannot waive interest. That's the law. They can waive penalties but not just because. There has to be a reason. The IRS has procedures to follow. It's a bureaucracy. See if you can fit yourself in the rules. (The rule book is the Internal Revenue Manual and it is online). I will put you in touch with someone who is good at this. Appeal to authority: I am a tax lawyer.

From a similar personal experience, definitely contact a tax lawyer or "Enrolled Agent". They know the system. An Enrolled Agent helped me get my situation resolved relatively quickly, which let me move on with my life.
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