Before you even consider an OIC, have you looked into whether you qualify for Currently Not Collectible status? If your financial situation is really tight, you might qualify for CNC which would pause your payments until your finances improve. It doesn't make the debt go away, but it gives you breathing room without the lengthy OIC process.

I went through the OIC process about 6 months ago with a similar debt amount ($12k from freelance work). Here's what I learned: First, the IRS really does look at your entire financial picture - not just the debt amount. They calculate your "reasonable collection potential" which includes your assets, income, and necessary living expenses. If you can demonstrate genuine financial hardship or that paying the full amount would prevent you from meeting basic living expenses, you have a shot regardless of the debt size. My biggest mistake initially was trying to do it myself. The forms are incredibly detailed and one small error can get your application rejected. I ended up working with a tax professional who helped me properly document my case. We showed that my current income barely covered my necessary expenses and that the monthly payment plan was actually causing me to go deeper into debt with credit cards just to cover basics. The process took about 8 months total, but I ended up settling for about 35% of what I owed. The key was proving that this was truly the most the IRS could reasonably expect to collect from me given my circumstances. One warning though - during the application process, you can't miss any payments if you're currently on a payment plan. They'll reject your OIC if you become delinquent while it's being reviewed.

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.

Has anyone used their home gym for both in-person training clients AND filming content for online coaching? I'm wondering if I can write off the entire room as a home office if it's used for both purposes?

Great question! I'm in a similar situation - planning to launch my personal training business early next year but want to get my equipment sorted now. From what I've researched, the key is showing "active preparation" for your business launch. One thing I'd add to the excellent advice already given - consider getting your business license and EIN now if you haven't already. Even if you're not actively earning revenue yet, having these official documents helps establish your business intent timeline for the IRS. Also, I'd recommend creating a detailed business plan that includes your equipment needs and how each piece will be used for client training. This documentation becomes really valuable if you ever get questioned about the business purpose of your purchases. Keep in mind that if you're buying higher-value equipment (like a $3,000 home gym setup), you might want to spread some purchases into 2025 to maximize your deduction benefits across tax years. Good luck with the launch!

I filed on February 5th and got my refund deposited on February 18th - so 13 days total! Much faster than I expected. I have a relatively straightforward return (W-2, some student loan interest deduction, and child tax credit), but I was still pleasantly surprised by the speed. One tip that might help while you're waiting - if you have the IRS app or access to your online account, you can also check the status there in addition to the "Where's My Refund?" tool. Sometimes one updates before the other. For your car repairs, if the refund doesn't come through in time, some auto shops offer payment plans or might work with you on timing if you explain the situation. Hope your refund comes through quickly!

Just wanted to add another data point to help ease your anxiety! I filed my return on January 28th and received my refund via direct deposit on February 10th - exactly 13 days, which was amazing compared to last year when I waited almost 5 weeks. My situation was a bit more complex too - I had W-2 income, some 1099-MISC freelance work, and claimed the American Opportunity Tax Credit for college expenses. I was worried the education credit might slow things down since those sometimes get extra scrutiny, but it went through without any issues. The key things that seemed to help: e-filing, direct deposit, and making sure all my documents matched exactly what was reported to the IRS. I also made sure to file during a weekday rather than weekend, though I'm not sure if that actually matters. For your car repairs situation, I totally get the stress of waiting! If it helps, most people in this thread seem to be getting their refunds well within that 21-day window this year. The IRS really does seem to have their act together better than in previous years. Keep checking that "Where's My Refund?" tool - once it shows "approved" you should see the money within a few days after that.