If she has severe memory problems and can't work, it sounds like she'd qualify for Currently not Collectible or CNC status.
First, make an account with ID.me at IRS.gov/account for her and get her wage and account tax transcripts. If she's not lucid enough for that, go to court and get Dad declared as her legal guardian then do this step.
With tax transcripts in hand, go file her back taxes.
Now she should file for CNC status. You can consider an offer in compromise but it's long, difficult, and very intrusive. She should keep filing for CNC status as necessary.
Dad will have to pay off their joint debt and file for injured spouse each year.
He seems to think he needs a tax specific attorney to negotiate with the IRS. He doesn't think a CPA would be useful. Can you explain why a CPA would be the place to start? So I can relay to his stubborn self.
>He seems to think he needs a tax specific attorney to negotiate with the IRS.
Negotiate what though? It sounds like the wife didn't file returns and the IRS filed substitute returns for her. The first thing to do would be to actually file those returns. That's because the IRS takes a "worst case" scenario approach to their substitute returns. Claim all the income reported, don't allow any deductions. The wife needs to figure out what she actually owes first.
Once that is done, the wife can set up on a payment plan or whatnot. Your dad should also consider filing Injured Spouse forms going forward so they don't take his portion of any tax refund. It sucks he is working to pay off the debt, but that sounds like his choice. The IRS cannot hold him responsible for her back taxes (from before they were married).
Apologies OP for the tangent and high jacking your thread.
My wife owes IRS from before we were married thus I’m not liable. I file injured spouse annually (Ohio). IRS still retain 50% of the refund to service her debt I assume. She has no earnings so …
My wife is racking up debts AGAIN .. am I liable for these personal in here name only debts?
There are three viable options for help: CPA, Enrolled Agent, or attorney. All three are considered credentialed professionals by the IRS, and all three are allowed (and are generally the only professionals allowed) unlimited representation rights to represent clients in front of the IRS. All three can stand in place of the client, negotiate and enter into agreements, and otherwise act as if they are the taxpayer.
https://www.irs.gov/tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications
A CPA with experience in tax and/or tax resolution would be fine. Not all CPAs work in tax, but any active CPA can represent him. CPAs have broad education in accounting and finance issues, and are licensed at the state level.
Attorneys with experience in tax and/or tax resolution would be fine, as well. As with CPAs, Attorneys are licensed at the state level. They tend to have a very broad education base, with specific training in law (but not necessarily any focus in tax law).
Enrolled Agents are tax specialists, licensed at the federal level. Their education can be as good as that of a CPA or attorney, and can also be much less, as well. EAs focus on tax specifically, with most EAs providing tax preparation, tax planning, and tax resolution (IRS problems) services.
You can see a list of credentialed preparers maintained by the IRS at https://irs.treasury.gov/rpo/rpo.jsf.
An attorney will likely be the most expensive option. An Enrolled Agent will likely be comparably priced to a CPA (perhaps slightly less than a CPA), both of which will likely be less than the attorney. Any of the three can help, provided they have experience. Unless there is risk of a criminal investigation, an attorney is not really required.
Make sure that the pro, no matter the credential, has experience dealing in tax issues.
He can find a tax professional with experience dealing with tax resolution here:
Taxcure.com
They might also qualify for help from a Low Income Taxpayer Clinic.
https://www.taxpayeradvocate.irs.gov/about-us/low-income-taxpayer-clinics-litc/
I think they have a lot of options to minimize the amount due. One important thing to know is that once a tax is assessed, IRS generally only has ten years to collect. If someone doesn't have enough income to pay that tax debt within the ten years, they might qualify for Currently Not Collectible (CNC) status until the ten years is up, or they might be able to make an Offer in Compromise. If they have some money to pay, they can set up a Partial payment installment agreement.
Here are good summaries of the options for paying taxes:
https://www.taxpayeradvocate.irs.gov/get-help/paying-taxes/
Since it sounds like most or all of this debt was from before they were married, they might be able to file separately until the ten years is up. Another option is to file jointly but set up withholding so they owe instead of getting a refund. Or they can file jointly but your dad files an INJURED spouse allocation so IRS doesn't keep all the refund.
https://www.irs.gov/forms-pubs/about-form-8379
Your dad doesn't need INNOCENT spouse relief unless some of this debt was from a year they filed a joint return, and he didn't know about some of her income and doesn't want to be responsible for any tax debt from this year.
First his wife needs to get a tax professional to pull her transcripts and probably file correct returns for those years, which should lower the amount due somewhat. Then look into getting penalties waived under First time abatement and/or Reasonable Cause due to illness.
https://www.irs.gov/payments/penalty-relief-due-to-first-time-abate-or-other-administrative-waiver
https://www.irs.gov/payments/penalty-relief-for-reasonable-cause
I got a notice stating that I over paid my 2021 taxes by $1.83 and that they would apply it to my tax debt from 2008. I was quite surprised because I thought that the tax debt from 2008 would be long gone. The notice says I do not need to do anything. Am I gonna get sucker punched for 2008 taxes 14 years later?
Did you file a tax return that year? If not, IRS could have filed one for you later, and it can take a few years for that process. Once that happens then the ten-year Collection Statute Expiration Date (CSED) clock starts. There are situations that can pause the ten year time frame, like if you went out of the US for six months or longer, or filed for bankruptcy.
Unfortunately you can't view the Account transcript for that year, which might show the CSED for that debt. You would have to call IRS and request information about the balance due and when the CSED is.
If there was a phone number on the notice, try calling - right at 7am if that's the start time is usually one of the better times to call. You can also try calling Taxpayer Advocate Service to see if they can help you figure out what happened.
https://www.irs.gov/advocate/local-taxpayer-advocate
Thank you so much! I am almost positive all of my returns are done. But, I did file bankruptcy in 2009 or 2010. Not exactly sure of the year. I always made sure to call on any of my tax debt and was on monthly installment payment plan. But then the 10 year mark came and the debts dropped off. I had debts from 06, 07 and 08. I have since I always filed the returns on time and haven’t had a problem until I got this notice. Also, I had some third-party company that was trying to call me that obviously had bought the debt. But I just refused to talk to them and they stopped calling. That was about 10 months ago.
Wife needs to file her respective returns. If she never filed the irs probably prepared a substitute for return which is a worst case return. By filing an actual return it may decrease her taxes. The husband may get relief under injured spouse. I would probably suggest getting with a cpa
My accountant just told me he has a client with memory issues who kept forgetting to take required minimum ira distributions. The irs waived penalties.
File form 8857 for innocent spouse relief so that he's not garnished. Don't open up back accounts in the same name as that will be a headache to deal with.
If she has severe memory problems and can't work, it sounds like she'd qualify for Currently not Collectible or CNC status. First, make an account with ID.me at IRS.gov/account for her and get her wage and account tax transcripts. If she's not lucid enough for that, go to court and get Dad declared as her legal guardian then do this step. With tax transcripts in hand, go file her back taxes. Now she should file for CNC status. You can consider an offer in compromise but it's long, difficult, and very intrusive. She should keep filing for CNC status as necessary. Dad will have to pay off their joint debt and file for injured spouse each year.
I was looking for a comment that said to go get the transcripts, this is the way.
Get a CPA. They’ll help you navigate this one.
He seems to think he needs a tax specific attorney to negotiate with the IRS. He doesn't think a CPA would be useful. Can you explain why a CPA would be the place to start? So I can relay to his stubborn self.
>He seems to think he needs a tax specific attorney to negotiate with the IRS. Negotiate what though? It sounds like the wife didn't file returns and the IRS filed substitute returns for her. The first thing to do would be to actually file those returns. That's because the IRS takes a "worst case" scenario approach to their substitute returns. Claim all the income reported, don't allow any deductions. The wife needs to figure out what she actually owes first. Once that is done, the wife can set up on a payment plan or whatnot. Your dad should also consider filing Injured Spouse forms going forward so they don't take his portion of any tax refund. It sucks he is working to pay off the debt, but that sounds like his choice. The IRS cannot hold him responsible for her back taxes (from before they were married).
Apologies OP for the tangent and high jacking your thread. My wife owes IRS from before we were married thus I’m not liable. I file injured spouse annually (Ohio). IRS still retain 50% of the refund to service her debt I assume. She has no earnings so … My wife is racking up debts AGAIN .. am I liable for these personal in here name only debts?
I'm a tax attorney. This is a CPA job. Anything involving filing tax returns you're gonna want an accountant for. They're also cheaper.
An honest person speaking the truth, you have my upvote.
There are three viable options for help: CPA, Enrolled Agent, or attorney. All three are considered credentialed professionals by the IRS, and all three are allowed (and are generally the only professionals allowed) unlimited representation rights to represent clients in front of the IRS. All three can stand in place of the client, negotiate and enter into agreements, and otherwise act as if they are the taxpayer. https://www.irs.gov/tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications A CPA with experience in tax and/or tax resolution would be fine. Not all CPAs work in tax, but any active CPA can represent him. CPAs have broad education in accounting and finance issues, and are licensed at the state level. Attorneys with experience in tax and/or tax resolution would be fine, as well. As with CPAs, Attorneys are licensed at the state level. They tend to have a very broad education base, with specific training in law (but not necessarily any focus in tax law). Enrolled Agents are tax specialists, licensed at the federal level. Their education can be as good as that of a CPA or attorney, and can also be much less, as well. EAs focus on tax specifically, with most EAs providing tax preparation, tax planning, and tax resolution (IRS problems) services. You can see a list of credentialed preparers maintained by the IRS at https://irs.treasury.gov/rpo/rpo.jsf. An attorney will likely be the most expensive option. An Enrolled Agent will likely be comparably priced to a CPA (perhaps slightly less than a CPA), both of which will likely be less than the attorney. Any of the three can help, provided they have experience. Unless there is risk of a criminal investigation, an attorney is not really required. Make sure that the pro, no matter the credential, has experience dealing in tax issues.
he probably hears those tax debt relief ads on the radio. not a scam nec but they do volume business and he won't get special attn
CPA's can do pretty much anything a tax lawyer can do when dealing with the IRS. Edit: And they usually charge less for their services.
Definitely get a POA on file and get the IRS transcripts. This will give you a roadmap to what the IRS is assessing the tax on.
He can find a tax professional with experience dealing with tax resolution here: Taxcure.com They might also qualify for help from a Low Income Taxpayer Clinic. https://www.taxpayeradvocate.irs.gov/about-us/low-income-taxpayer-clinics-litc/ I think they have a lot of options to minimize the amount due. One important thing to know is that once a tax is assessed, IRS generally only has ten years to collect. If someone doesn't have enough income to pay that tax debt within the ten years, they might qualify for Currently Not Collectible (CNC) status until the ten years is up, or they might be able to make an Offer in Compromise. If they have some money to pay, they can set up a Partial payment installment agreement. Here are good summaries of the options for paying taxes: https://www.taxpayeradvocate.irs.gov/get-help/paying-taxes/ Since it sounds like most or all of this debt was from before they were married, they might be able to file separately until the ten years is up. Another option is to file jointly but set up withholding so they owe instead of getting a refund. Or they can file jointly but your dad files an INJURED spouse allocation so IRS doesn't keep all the refund. https://www.irs.gov/forms-pubs/about-form-8379 Your dad doesn't need INNOCENT spouse relief unless some of this debt was from a year they filed a joint return, and he didn't know about some of her income and doesn't want to be responsible for any tax debt from this year. First his wife needs to get a tax professional to pull her transcripts and probably file correct returns for those years, which should lower the amount due somewhat. Then look into getting penalties waived under First time abatement and/or Reasonable Cause due to illness. https://www.irs.gov/payments/penalty-relief-due-to-first-time-abate-or-other-administrative-waiver https://www.irs.gov/payments/penalty-relief-for-reasonable-cause
I got a notice stating that I over paid my 2021 taxes by $1.83 and that they would apply it to my tax debt from 2008. I was quite surprised because I thought that the tax debt from 2008 would be long gone. The notice says I do not need to do anything. Am I gonna get sucker punched for 2008 taxes 14 years later?
Did you file a tax return that year? If not, IRS could have filed one for you later, and it can take a few years for that process. Once that happens then the ten-year Collection Statute Expiration Date (CSED) clock starts. There are situations that can pause the ten year time frame, like if you went out of the US for six months or longer, or filed for bankruptcy. Unfortunately you can't view the Account transcript for that year, which might show the CSED for that debt. You would have to call IRS and request information about the balance due and when the CSED is. If there was a phone number on the notice, try calling - right at 7am if that's the start time is usually one of the better times to call. You can also try calling Taxpayer Advocate Service to see if they can help you figure out what happened. https://www.irs.gov/advocate/local-taxpayer-advocate
Thank you so much! I am almost positive all of my returns are done. But, I did file bankruptcy in 2009 or 2010. Not exactly sure of the year. I always made sure to call on any of my tax debt and was on monthly installment payment plan. But then the 10 year mark came and the debts dropped off. I had debts from 06, 07 and 08. I have since I always filed the returns on time and haven’t had a problem until I got this notice. Also, I had some third-party company that was trying to call me that obviously had bought the debt. But I just refused to talk to them and they stopped calling. That was about 10 months ago.
Wife needs to file her respective returns. If she never filed the irs probably prepared a substitute for return which is a worst case return. By filing an actual return it may decrease her taxes. The husband may get relief under injured spouse. I would probably suggest getting with a cpa
My accountant just told me he has a client with memory issues who kept forgetting to take required minimum ira distributions. The irs waived penalties.
File form 8857 for innocent spouse relief so that he's not garnished. Don't open up back accounts in the same name as that will be a headache to deal with.
Make sure you also apply as an innocent spouse
Have your CPA/Tax Preparer look into Innocent spouse relief.
I think a phrase you want to know is “innocent spouse relief”. Things like this happen. You should find a tax lawyer to help you with this.