What a mess!

Hi June,

I'm in a real tax mess and need help getting out of it BIG-TIME!

I've been self employed for about 16 of the last 20 years and got in trouble in my early 20's with the IRS by not having enough money at the end of the month to pay taxes on my meager earnings, this went from about 1986 - 1995 (very low yearly income).

Then I was an employee for about 3 years until I "discovered" the Internet and realized that there's a TON of money to be made on it. I spent from about 1999 - 2002 struggling along and from 2002 thru the present, my income has increased substantially, however, because of all my prior problems, I've neglected to straighten things out with the IRS, mainly out of fear, however, I know I'm digging a deeper hole.

Even with the fear, I've tried a few times to resolve everything, however, it always required too much money and with low income (back then) liens and bad credit, it was impossible to satisfy the IRS, and honestly, I don't think the two CPAs I was working with knew enough about being self employed.

Right now, I need to find a way to protect my income (Corporation/Trust?) and I need to start getting this mess straightened out, buy a home and stop paying rent at a higher rate than a mortgage.

Is there any such thing as a self employed tax expert that can protect my income, work with the IRS on my behalf and get me back on track for the first time in 20 years, my wife and I would really appreciate it, this drives her nuts ;-)

Thanks for reading.
Eric


Hello Eric,

I did my best to figure out just what you're saying and I attempted to ascertain just what services and/or help you're looking for. Here's what I think:

Some years you have and some years you have not filed a tax return.
Which years are which is not clear.

You owe the IRS [and state(s)?] back taxes. 16 years!!! Really?
How much you owe and to whom for which years is not clear.

"Protect my income" doesn't mean anything. It's a term tax novices like to throw out.

Do not:
Incorporate or set up a trust

Do:
Complete a list with the following column headings --
year -- tax return filed: yes or no -- $$ amount owe feds -- $$ owe state -- rec'd IRS notice -- if not filed: have records so can file
Bring the list with you to your meeting with the tax professional.

Yes, there is a tax pro who can help you. An accountant may be enough. Depending on how much you owe, you may also or instead need a tax attorney. Start by finding a local accountant-- one you can meet with face-to-face -- one who is familiar with offers-in-compromise. That's an offer to the IRS to pay a portion of what you owe. In exchange for paying less than you owe you promise the government to play by the rules from now on. The accountant must also be familiar with self-employeds. Contact your local Small Business Association or the business organization at your community college for a tax pro recommendation.

File all back tax returns.

Get on a payment schedule. You must keep that payment schedule or you'll lose the offer-in-compromise agreement.

Be really nice to your wife so she does't leave you for creating such a mess.

Good Luck!
June