Something nobody's mentioned yet - make sure you're not double-dipping! If your S corp reimburses you for mileage under an accountable plan, then the CORPORATION takes the deduction on its tax return. You as an individual can't also deduct those same miles on your personal return. I almost made this mistake last year after switching from a Schedule C business (where I claimed miles directly) to an S corp. My accountant caught it at the last minute. The corporation should record the mileage reimbursement as a business expense, and you receive it tax-free as the employee.

Don't forget about COMMUTING miles vs BUSINESS miles. This tripped me up my first year with an S corp. The miles from your home to your primary business location are considered commuting and are NOT deductible, even with an accountable plan. Only miles from your office to client locations, between different work sites, or for other business purposes can be reimbursed. I lost about 30% of my claimed mileage last year because I incorrectly included commuting miles in my reimbursement request. Had to amend returns and it was a huge headache.

The real question here is how deeply OP wants to be involved. There are basically three paths: 1. Pretend you never saw anything (risky if they ever get caught and the IRS thinks you knew) 2. Confront them directly and try to convince them to come clean through voluntary disclosure (IRS has programs for this) 3. Report them through the whistleblower program There's no easy answer here but remember that willful tax evasion at this scale is a felony. This isn't "oops I forgot to report some income" - this is deliberate, sustained criminal behavior. Think carefully about your own liability and what you can live with morally.

This is such a heartbreaking situation, and I can only imagine the stress you're going through. Finding out about family members committing serious crimes puts you in an impossible position. One thing I haven't seen mentioned much is the statute of limitations aspect. For tax fraud, the IRS generally has 6 years to assess additional taxes, but there's no statute of limitations for willful tax evasion or fraud. This means your father could potentially face consequences going back decades, which makes the situation even more serious. I'd strongly echo the advice about consulting with a tax attorney who specializes in criminal tax defense. They can help you understand not just your family's exposure, but also your own potential liability for having knowledge of ongoing tax crimes. There's something called "willful blindness" where simply ignoring obvious criminal activity can sometimes create legal issues. The hardest part is that doing nothing isn't really a neutral choice here. If this eventually comes to light through an audit or other investigation, the fact that you knew and said nothing could be viewed negatively. But reporting family members for crimes that could result in prison time is an unimaginably difficult decision. Whatever you decide, document everything you've discovered and keep those records secure. You may need them regardless of which path you choose.

I'm a little confused by some of the advice here. My understanding is that with a deceased person's tax debt, the IRS can only collect from the estate, not from the heirs personally. So if the estate doesn't have enough assets to cover the debt, couldn't you just let the IRS take whatever's there and be done with it? Why go through the OIC process at all?

This is such a difficult situation, and I'm sorry for your loss. One thing that hasn't been mentioned yet is the timing aspect - you mentioned filing for probate before discovering the tax debt. This actually creates some urgency because once probate is open, creditors (including the IRS) have a specific timeframe to file claims against the estate. The IRS typically has one year from the date they receive notice of the death to assess additional taxes, but they can also file claims during the probate process. Since you've already filed the missing returns, they now have all the information they need. Given the condition of the properties you described, I'd strongly recommend getting professional photographs and written estimates for cleanup/repair costs ASAP. Document everything - the pest infestation, structural damage, utility issues, etc. This evidence will be crucial whether you pursue an OIC or the IRS just takes what's available. Also consider that even if you can't keep much from the estate, settling through an OIC might give you more control over the process and timing rather than having the IRS force liquidation of everything. The mobile home might actually have negative value once you factor in cleanup and disposal costs, which could work in your favor.

Has anyone here used TurboTax for this kind of situation? I also get a car allowance from my employer AND use my car for my side business. Wondering if TurboTax handles this well or if I need to pay for a CPA this year.

I went through this exact situation last year with my consulting business and W2 job that provided a vehicle allowance. The key thing to understand is that you absolutely CAN claim depreciation on the business portion of your vehicle even while receiving a W2 stipend - they're completely separate tax situations. Here's what worked for me: I calculated my total business mileage (excluding the W2 job miles since that's covered by the stipend) and divided by total miles driven to get my business use percentage. For a $45k truck, if you use it 60% for your own business, you can depreciate 60% of the cost. Keep detailed mileage logs with dates, destinations, and business purposes. I use a simple spreadsheet that tracks: date, starting odometer, ending odometer, destination, and whether it's personal, W2 job, or my business. This documentation is crucial if you're ever audited. One more tip - consider whether your truck qualifies as a heavy vehicle (over 6,000 lbs GVWR) because you might be able to take a larger Section 179 deduction in the first year instead of spreading depreciation over several years. Just make sure your business use percentage stays above 50% to qualify.

Anybody have experience with zero coupon municipal bonds for this situation? I heard they're sold at a discount and the gain at maturity is considered capital gain, not interest income. Wondering if that might work for using up capital loss carryover.

Have you considered dividend growth stocks or REITs? While they do generate some ordinary income through dividends, they also tend to appreciate over time, giving you capital gains when you sell. You could strategically sell positions throughout the year to realize gains that would be offset by your $26k carryover. Another angle - if you have any appreciated assets in other accounts (like an old 401k rollover or taxable brokerage account), this might be a good year to do Roth conversions or rebalance by selling winners, since your capital losses would offset the gains. Just be careful about wash sale rules if you're buying and selling similar securities. You want to make sure any losses you might incur don't get disallowed because you repurchased substantially identical securities within 30 days.