I went through something very similar last year with my grandmother who won $7,200 but couldn't travel to claim it due to health issues. After reading all the horror stories about tax complications, I contacted the Pennsylvania Lottery directly to understand the proper procedure. In PA, you can use what's called a "Claim Authorization Form" which allows someone else to claim the prize on behalf of the actual winner. Your uncle would need to complete this form, have it notarized, and provide a copy of his ID. You'd present this along with the winning ticket when you claim the prize. The key is that the W-2G will still be issued in your uncle's name and SSN, not yours, so he's responsible for the taxes. The lottery office will verify everything before processing the claim to make sure it's legitimate. I'd recommend calling the PA Lottery at 1-800-692-7481 to confirm you have all the required documents before making the trip. They were actually pretty helpful when I explained the situation, and the whole process went smoothly. Just make sure everything is properly documented so there's no confusion with the IRS later.

This is really helpful information everyone! I just want to add one more important consideration - make sure you check the expiration date on that scratch-off ticket. In Pennsylvania, lottery tickets typically expire 1 year from the end of the game, but scratch-offs can have different expiration dates printed on them. Since you mentioned you're planning to go to the city "next week," you should have plenty of time, but it's worth double-checking so you don't run into any last-minute rushes. The PA Lottery website has a section where you can look up when specific scratch-off games end if you're not sure. Also, if your uncle is comfortable with technology, some lottery offices now allow you to submit the Claim Authorization Form electronically ahead of time, which can speed up the process when you arrive. Might be worth asking about when you call that number Lauren provided. Good luck with everything, and props to you for being so careful about doing this the right way! Your uncle is lucky to have someone looking out for him properly.

Anybody know how this works with state taxes? If I donate RSUs to avoid federal capital gains, do I also avoid state capital gains tax in California? My company is headquartered in Texas but I live and work in California.

One thing to consider that hasn't been mentioned - timing your donation strategically within the tax year. If you're planning to donate anyway, you might want to bunch multiple years of charitable giving into this year to maximize the benefit of itemizing deductions. For example, if you normally donate $5,000 annually but take the standard deduction, you could donate $15,000 worth of your appreciated RSUs this year (covering this year and the next two years), itemize to capture the full deduction benefit, then take the standard deduction in the following years when you're not making large donations. This bunching strategy can be especially valuable with stock donations since you're avoiding capital gains tax on a larger amount while also maximizing your deduction benefit. Just make sure you're comfortable with the larger donation amount and have selected reputable charities or a donor-advised fund to manage the distribution over time.

Don't forget about state taxes too! I caught up on my federal returns and completely forgot I needed to do state returns as well. Had to go back and do the whole process again. Most states have similar rules for prior year returns (paper filing only).

Great advice in this thread! One thing I'd add that helped me when I caught up on my back taxes - consider filing in chronological order (oldest first) rather than all at once. This can help avoid potential processing delays or confusion at the IRS, especially if there are carryover items like net operating losses or credits that might affect multiple years. Also, if you discover you made errors on returns you've already filed while working on the older ones, you can file amended returns (Form 1040X) to correct them. Just keep in mind the 3-year deadline for claiming additional refunds applies to amended returns too. The IRS actually has a pretty helpful "Get Transcript" tool on their website where you can see what they have on file for you for each year. It's worth checking before you start to see if they've already processed substitute returns for any years (they sometimes do this when people don't file). If they have, you'll want to file your actual returns to replace their estimates, which are usually not in your favor.

Has your brother filled out a FAFSA for college? If your mom can't claim him as a dependent due to his investment income, he should file the FAFSA as an independent student, which might actually help him qualify for more financial aid since only his income and assets would be considered, not your mom's. This could potentially offset some of the tax disadvantages of not being able to be claimed as a dependent. Just something to consider for the bigger financial picture.

Based on everything discussed here, it sounds like your mom unfortunately cannot claim your brother as a dependent due to his $19k in investment income exceeding the $4,850 gross income limit for 2024. Since he's over 24, he can't qualify as a "qualifying child" where investment income wouldn't matter. However, this might actually work out better financially for your family overall. Your brother should definitely file his own return and will be able to claim his full standard deduction. More importantly, he'll likely qualify for education tax credits like the American Opportunity Credit (up to $2,500) or the Lifetime Learning Credit, which could provide significant tax benefits that your mom wouldn't be able to claim for him anyway. For your mom's situation, make sure she explores other tax benefits available to retirees. Since she retired mid-year, she should check if she qualifies for the Retirement Savings Contribution Credit on any 401k contributions she made before retiring. Also, if she hasn't already, she should review her withholding on any pension or Social Security benefits to avoid underpayment issues next year. Sometimes what looks like a tax disadvantage initially can actually work out better when you look at the whole picture!

Thanks for starting this discussion! I'm in a similar boat with about $28k in back taxes from my consulting business. Reading through everyone's experiences has been really eye-opening. I've been leaning toward trying the DIY approach first using some of the tools mentioned here. The idea of paying $4-5k upfront to a company like TaxRise when I might be able to handle it myself (or with a local CPA for much less) makes a lot of sense. One question for those who've gone the self-representation route: how did you handle the intimidation factor of dealing directly with the IRS? I keep imagining worst-case scenarios where I say the wrong thing and make my situation worse. Any tips for building confidence before making that first call? Also, has anyone used the Taxpayer Advocate Service? I've seen it mentioned on the IRS website but not sure if it's relevant for situations like ours.

I really appreciate everyone sharing their experiences here! As someone who's worked in tax resolution for over a decade, I want to add a few thoughts that might help you make the best decision for your specific situation. The $36k debt with multiple unfiled returns definitely makes your case more complex than a simple installment agreement. Companies like TaxRise can be worth it IF you truly don't have the time or capacity to handle it yourself, but you're right to be cautious about the costs. Here's what I'd recommend: Start by getting your tax transcripts from the IRS (you can order these online) and filing those missing returns yourself or with a local preparer. Once you have a complete picture of what you actually owe (penalties and interest can be negotiated), then decide if you want professional help. The Fresh Start program mentioned earlier is real and has helped millions of taxpayers. For your debt level, you'd likely qualify for a streamlined installment agreement without extensive financial disclosure if you can pay it off within 72 months. One red flag to watch for with ANY tax relief company: if they guarantee specific outcomes or tell you to stop communicating with the IRS while they "handle everything," run. Legitimate professionals will always be upfront about what they can and cannot promise. Your health crisis and business complications might actually work in your favor for penalty abatement - the IRS has reasonable cause provisions that many taxpayers don't know about.