A bit off topic, but make sure you're checking credentials before hiring a tax preparer in the future! I made the same mistake years ago. Always verify they have a PTIN (Preparer Tax Identification Number) at a minimum, and ideally look for an EA (Enrolled Agent), CPA, or tax attorney. Random storefront tax places can be sketchy. I now check the IRS directory of preparers before hiring anyone: https://irs.treasury.gov/rpo/rpo.jsf

A word of caution from personal experience - when you file that amended return, make sure you pay any additional tax ASAP. Interest keeps accumulating from the original due date of the return, not from when you discover the problem. I reported my preparer last year and ended up owing about $3,800 in additional taxes, plus almost $450 in interest because I waited a few months to actually pay after filing the 1040-X.

Don't forget about tax treaties! Many countries have tax treaties with the US that can reduce or eliminate withholding for J1 research scholars. For example, if you're from the UK, Germany, China, or India (among many others), you might qualify for reduced withholding. You'll need to fill out Form 8233 in addition to your W4 to claim treaty benefits. Your university should have this form available through the international office or payroll department.

As someone who went through this exact situation last year, I want to emphasize something that might not be obvious: even though you'll likely become a resident alien later in 2024, you should absolutely check the nonresident alien box on your W4 right now. Here's why this matters: your current withholding needs to match your current status. If you don't check the box, your employer will withhold taxes as if you're a US resident from day one, which could result in significant overwithholding that you'll have to wait until tax season to recover. When your status does change (likely after your second calendar year as a J1, not just based on days present), you can submit a new W4 to adjust your withholding going forward. Most universities are very familiar with this process since they deal with international scholars regularly. One more tip: keep detailed records of all your entry/exit dates and visa statuses. You'll need this information for your tax return, and it helps if any questions come up about when exactly your residency status changed.

One thing nobody has mentioned is that there's a specific threshold for "seriously delinquent tax debt" that triggers passport restrictions. As of 2025, the threshold is $59,000 (they adjust it for inflation). If your family member's debt is close to that amount, they might be able to get under the threshold with those small payments they're making, which would lift the passport restriction even before the CSED. Also, entering into a formal payment agreement (even if they can't pay it all off before the CSED) would immediately make them eligible for a passport again. The IRS removes the certification when you have an approved payment plan, even if the debt still exists. Sometimes this is a faster solution than waiting for the CSED if you need to travel soon. The IRS will notify the State Department within 30 days of any of these remedies, and then you can apply for a passport normally.

Something important no one mentioned - check if your family member qualifies for an exception to the passport restrictions! In my experience, there are several situations where the IRS can't revoke passport privileges even with seriously delinquent tax debt: 1. If they're in bankruptcy 2. If they're a victim of tax-related identity theft 3. If they're in a federally declared disaster area 4. If their account is currently not collectible due to hardship 5. If they have an innocent spouse claim pending My passport restriction was reversed when I proved hardship status, even though my debt was still on the books. Worth looking into these options rather than just waiting for the CSED!

Just a warning - if the IRS filed Substitute for Returns (SFRs) for any of those years you missed, you're probably looking at a much higher tax bill than if you file yourself. The IRS doesn't include most deductions or credits when they file for you. I didn't file for 2 years, and the IRS created SFRs that said I owed $22k. When I finally got my act together and filed proper returns with all my legitimate deductions, my actual liability was only $7,800. Huge difference! Either way, filing properly is always better than those tax relief companies. They'll charge you thousands just to do what an accountant can do for a few hundred dollars.

I'm dealing with a similar situation right now - 2 years behind on both personal and business filings. One thing I learned from my research is that the IRS actually has a Voluntary Disclosure Practice that can help reduce penalties if you come forward before they contact you. The key is getting those returns filed ASAP. I've been gathering all my bank statements and receipts, and honestly it's not as overwhelming as I thought it would be once I started organizing everything by year. For what it's worth, I called a few local CPAs and got quotes ranging from $800-1500 per year for business returns, which is way less than those TV companies were quoting me. Most said if my records are reasonably organized, they could have everything filed within 2-3 weeks. The penalty structure someone mentioned earlier is accurate - it's based on what you actually owe, not what you think you might owe. So if you end up with refunds or small balances, the penalties aren't nearly as scary as they sound.

Another option nobody mentioned is setting up EFTPS (Electronic Federal Tax Payment System). It's clunky and takes like 2 weeks to get set up bc they mail you a PIN, but once it's active you can schedule all your quarterly payments in advance. The verification for that was easier for me as a first-timer than the regular IRS payment site.

I went through this exact same frustration when I started my consulting business! The verification loop is so annoying when you're trying to be responsible about quarterly payments. What worked for me was using my AGI and filing status from my most recent W-2 return (2023) for the verification step. The system doesn't actually care that it wasn't self-employment income - it just needs to verify you're really you using ANY previous tax filing. If you're still stuck, try the EFTPS system that Miguel mentioned. The verification process there was slightly different and I found it easier to navigate as a first-timer. Yes, you have to wait for the PIN in the mail which is annoying, but once it's set up you can schedule all your quarterly payments for the year in one sitting. Don't let this discourage you from staying on top of your quarterlies - you're already ahead of so many freelancers by thinking about this early!