Has anyone tried working with a tax attorney instead of dealing with the IRS directly? I'm in a similar situation owing about $45k and wondering if it's worth the expense.

I'm going through something similar right now - owe about $58k and was terrified they'd force me to liquidate everything. After working with the IRS directly, I can confirm what others have said about them being more reasonable than expected. They absolutely do NOT require you to drain your entire savings or sell essential assets like your car. The key is being completely honest about your financial situation. When I filled out Form 433-F, I documented every expense including my modest emergency fund (about 3 months of expenses) and they accepted it as reasonable. They even acknowledged that having some emergency savings actually makes you more likely to stick to the payment plan. My advice: don't panic and start liquidating assets before talking to them. With your $60k income, you'll likely qualify for a payment plan around $800-1000/month depending on your other expenses. The IRS wants to get paid, not destroy your ability to earn income or maintain basic living standards. Take a deep breath - this is manageable even though it feels overwhelming right now.

Just adding some practical advice as someone who's been investing in physical metals for about 8 years now. Keep EXTREMELY detailed records of every purchase: 1. Save all receipts (take photos as backup) 2. Create a spreadsheet tracking: - Date of purchase - Weight/amount purchased - Price paid per ounce/gram - Total price including any premiums - Where you purchased it Trust me, when you go to sell years later, reconstructing your cost basis is a nightmare without good records. I had to pay taxes on more profit than I actually made on my first silver sale because I couldn't prove my original purchase price for some bars.

Great question Emma! I've been investing in precious metals for about 3 years now and learned these tax rules the hard way. Here's the super simple breakdown: **When you buy:** No taxes owed (except maybe state sales tax depending where you live) **When you sell:** Any profit gets taxed as "collectibles" - this is KEY because it's different from stocks. Gold and silver are always considered collectibles by the IRS, whether bars or coins. **The tax rates:** - Hold less than 1 year = taxed as regular income (your normal tax bracket) - Hold more than 1 year = maximum 28% tax rate (higher than regular long-term capital gains) **The reporting:** You must report ANY profit, even $10. No minimum threshold. Use Schedule D on your tax return. **Record keeping is CRUCIAL:** Save every receipt, track purchase dates/prices, and take photos of everything. Without proper records, the IRS could tax your entire sale amount instead of just the profit. One tip: if you're buying from local dealers with cash, get a written receipt every time. I learned this lesson when I couldn't prove my cost basis on some early purchases and ended up paying more tax than I should have. The good news is once you understand the system, it's pretty straightforward. Just treat it like any other investment for tax purposes, but remember that higher collectibles rate!

Not to go off-topic, but what tax software do people recommend for reporting gambling? I tried using TurboTax last year and it was terrible for handling my gambling - kept wanting me to enter every single session separately which would have been hundreds of entries.

I feel your frustration completely. I've been dealing with similar issues as a poker player who travels to tournaments. The current system is absolutely backwards - you can win $10,000 in January, lose $12,000 over the rest of the year, and still owe taxes on that $10,000 "income" even though you're net negative $2,000. What really gets me is that the IRS treats gambling differently from other activities. If you're a day trader and lose money, you can deduct those losses against other income (up to $3,000 per year). But gambling losses? Only deductible against gambling winnings, and only if you itemize. I've been following the legislative side of this issue, and unfortunately Omar is right - reform isn't happening anytime soon. The revenue loss estimates kill any momentum these bills might have. The gambling industry keeps pushing for change, but Congress sees those billions in tax revenue and won't budge. My advice? Keep those meticulous records you mentioned, consider whether you might qualify for trader/professional status if your volume is high enough, and maybe look into some of the tools others have mentioned here for better organization. The system sucks, but we're stuck with it for now.

Has anyone considered that exclusive use is sometimes not easy to prove? I use a room that's technically a bedroom as my home office, but it has absolutely nothing in it except office furniture and equipment. Would an IRS agent look at the room layout and decide it's not exclusive use just because it could be a bedroom?

One thing I haven't seen mentioned yet is the importance of tracking your actual work hours between locations. Since you mentioned going to the firm office every 2-3 weeks, you should document the time spent at each location throughout the year. The IRS uses this as a key factor in determining your "principal place of business." Keep a simple log showing dates, hours worked from home vs. firm office, and types of activities performed at each location. This becomes crucial evidence if you're ever audited. Since you're working 40+ hours weekly from home and only visiting the firm office occasionally, your documentation should clearly support that your home office is indeed your principal place of business. Also, make sure you're not mixing any personal activities in that dedicated room - no personal computer use, no storing personal items, etc. The exclusive use test is where many people trip up during audits.

For the nanny income specifically, since it was family (her cousin), do you think there was an understanding this was "under the table"? Because that complicates things. If you suddenly report this income, you could potentially create problems for the family that employed her if they didn't handle their end of the household employment taxes. Not saying don't report it, but just something to consider. Maybe have a conversation with the cousin first?

For your wife's nanny income, wouldn't she need to pay self-employment tax too? That's an extra 15.3% on top of regular income tax, right? That seems like it would be a big hit on back taxes you're already struggling with.