My accountant informs me that it looks like I owe heap of money to the IRS from 2001. More than I have, and more than I think I have a hope of paying off in my lifetime. So, I expect that I am going to have a nice long fight on my hands for a while. If anyone else out there has been in a similar situation and can offer your experience and advice, I would appreciate it. I've been thinking about this situation. I think that it is very important that I do not screw up in 2002 and future years just to satisfy my 2001 tax liabilities. In otherwords, I screwed up in 2001 bad. Fine. I'm dealing with it. But if I have a series of screwed up years under my belt, then I will never recover. So I think that all taxes that I pay will be directed towards current tax obligations, rather than towards past tax liabilities. Can I demand that the IRS apply any money I send to them towards a particular tax year? I don't want them taking my 2002 taxes and applying them towards the big 2001 hole. I am currently in a payment plan for back taxes I owe from 2000. I've been on schedule with that and have not missed a payment. I still owe about $6k on that one. I don't expect to have that paid off until sometime in 2003. My tax guy tells me that unless I satisfy my 2000 tax payment plan, the IRS will not work with me on my 2001 taxes. Because I can't afford to meet my 2000 payment plan, my 2002 tax liabilities, AND my 2001 taxes, I think that I will have no choice but to let 2001 go to hell. My tax guy also said that BK does not protect you from back taxes unless those taxes are over two years old. So that is not an option... yet. I think I have no choice but to ignore the 2001 taxes for two years, keep current on my 2000 payments and make sure my current 2002+ taxes are paid. Then in two years reasses my situation, and either force a payment agreement or declare BK. In the meantime I know that the IRS can put the pressure on me. I am working outside the US right now (in Australia), and except to continue to do so for some time. I have very little US income anymore. I also have very little US expenses too. I have my alomoney payments, my IRS payments, and a few minor things that I need for my business. If the IRS garnishes my US bank accounts, they won't find anything in them. I only transfer enough money in to pay the above debts in the US. I do get US dividend income from retirement accounts, and that would hurt if they started grabbing that money. I have no assets in the US anymore to speak of. My ex and her lawyer took everything in 2001. I have my old pickup truck at my mom's ('88 with 250k mi.), and my retrement accounts. I'm pretty sure that my retirement accounts (401k) are protected from the IRS by EIRSA. So they can't go looting them. What else? I am a US citizen. I do travel back home from time to time. I wonder if I could get arrested? I do file tax returns. I just don't have the money to pay the taxes my returns claim I owe. Last question. If they decide to audit me, and I'm living in Australia, I wonder if I can claim it to be an excessive hardship to attend an audit? My receipts and paper work are in boxes in my mom's garage in the US. If they wanted to see them, I would have to either fly to the US, or have boxes of paper shipped to Oz and them I would have to prepare the "answers" they want here and mail them to the auditor. Thanks in advance.
I cannot answer your question specifically, but I have seen places where there are lawyers that work with people who owe back taxes and can set up payment plans and get you settlements for pennies on the dollar. I cannot for the life of me know where you can begin to look for them. Again, I don't know anything about back taxes, but I wonder if you could benefit from speaking to some type of lawyer. (A lawyer that deals with tax issues). Whatever happens, good luck.
Called an "offer In Compromise". The IRS works EXACTLY the same way a collection agency does. They can only collect the money YOU say you owe them, called an assessment. All they care about is "getting the money". If they believe that their ability to "get your money" might be compromised they'll back off. I learned how to handle these jack asses a long time ago. You'll take what I can give you and be happy you get that. Find an atty. who specializes in "offer in compromise" and have a chat with him. You'll feel much better.
Thanks. Actually, they have not been jackasses to date. Of course, we haven't gotten down to brass nuckels yet. The gloves come off next month. I just like to have a battle plan in place before I enter the ring with them. I expect that before we get to a point where they will consider an "Offer in compromise", they are going to have to exercise all their options. Nothing wrong with that. I would do the same thing. So I expect we will have a nice fight on our hands for a while. Back when I had to fight my creditors I went through the same process. They had to try all their tricks, event the dirty and illegal ones, before they came to their senses and learned that I would fight them to the death. Only at that point was I able to get them under control. I am thinking about finding a good street-fighting lawer on this one to help me.
GET A IRS LAWYER. If you had legal problems (criminal,civil,credit) that were serious enough to endanger your lifestyle, you'd get a lawyer. Seriously.
My accountant informs me that it looks like I owe a heap of money to the IRS from 2001. cable666 | ================ What kind of an accountant is it that would let a client get into such a tax mess like this year after year?
Cable666, You might want to quizz your acccountant and lawyer about any possible changes to discharging back taxes in bk if this new bk bill passes.
Yeah, you'd think that after the first year, he'd advise you to do some better strategic planning. Sounds like you need a new tax accountant. Tell him that you can't afford to pay him because you owe some much in taxes! Good luck. sirrowan
Ever stop to think that perhaps you don't owe Unca Sammy that much money due to poor advice from the accountant.?
Get a new Accountant! My husband owed back taxes on 4 seperate years, He went to the IRS and asked to be put on a Payment Plan. What they did was put all of the tax years together on the plan and he had a fixed monthly payment, every month we would get a statement before our next payment was due and the taxes were applied to the most recent year first, we made extra payments whenever we were able but as long as we paid on time every month we were never bothered and were able to payoff the taxes in a little over a year and a half. I realize your situation may be much different but I was responding because it seems to me your accountant gave you some bad info and I wanted to share my experience. I hope it helps! I don't know your situation but it sounds like your tax guy was asleep at the wheel. My husband did not make that much money so he only owed a little over two thousand five hundred but it kept us out of "risk".
