Don't forget about all the penalties that stack up when you don't file for multiple years! Make sure your CPA is looking into Penalty Abatement options. My sister was able to get a First Time Penalty Abatement for one of her unfiled years which saved her about $8k in penalties. Won't solve the whole problem but every bit helps with a debt this size.

I went through something similar with my business about 3 years ago - owed around $150k for unfiled returns. Your CPA is generally right about the IRS being reasonable if you're proactive and stick to a payment plan, but there are some things to be prepared for: First, they will almost certainly file a Notice of Federal Tax Lien once the amount is assessed, even if you're on a payment plan. This protects their interest but doesn't mean they'll seize your assets immediately. The lien can affect your credit score and make it harder to get loans or refinance, but you can still live normally. Second, make sure your payment plan is realistic. The IRS wants to see you can actually make the payments long-term. If you default on the agreement, that's when enforcement actions become more likely. One thing that really helped me was getting current on all future filings immediately. The IRS looks much more favorably on taxpayers who are compliant going forward while paying off old debt. Also, consider having your CPA look into Currently Not Collectible status if your financial situation makes even minimum payments difficult. This can temporarily pause collection activities while you get back on your feet. The key is being proactive and communicating with the IRS rather than avoiding them. It sounds like you're on the right track by filing voluntarily before they come after you.

Has anyone had issues with their state taxes and solar credits? I'm in California and have heard there are additional state incentives, but I'm not sure how they interact with the federal credit.

One thing that might help clarify the tax liability vs refund confusion - think of it this way: your tax liability is like the total bill for dinner at a restaurant. Throughout the year, you're making payments toward that bill through payroll withholding. If you overpay (like leaving a $50 tip on a $30 meal), you get change back - that's your refund. But the solar credit applies to the actual meal cost (your tax liability), not just the change you get back. So if your total tax liability is $4,000 and you paid $5,500 through withholding, you'd normally get a $1,500 refund. With an $8,400 solar credit, it would wipe out your entire $4,000 liability, you'd get back all $5,500 you paid in, and you'd carry forward $4,400 to next year's taxes. The key insight is that adjusting your withholding doesn't change your liability - it just changes the timing of when you pay it.

One thing to be aware of - if you receive a W-2G, the IRS also received a copy. So ignoring it will definitely cause problems since they'll be expecting to see that income reported on your tax return. If you don't report the winnings that are on your W-2G, you'll almost certainly get a letter from the IRS later asking why the income wasn't included. That could potentially lead to penalties and interest on top of any taxes owed.

Just wanted to add some clarity on the timing aspect - you don't need to wait until you receive your W-2G in the mail to start preparing. Casinos are required to give you a copy immediately when you win, and they must send the official form to you (and the IRS) by January 31st. Also, keep in mind that gambling winnings are considered "other income" and get reported on Schedule 1 (Form 1040), line 8b specifically. The withholding amount from your W-2G gets entered on your main 1040 form along with other tax payments and withholdings. One last tip - if you're planning to claim gambling losses to offset your winnings, make sure you have detailed records before you file. The IRS can be pretty strict about gambling loss documentation, so having a contemporaneous log with dates, locations, and amounts is crucial if you ever get audited.

My sister works for the IRS (not in collections) and she always says most OICs fail because people don't give COMPLETE financial information. They leave stuff out thinking the IRS wont notice. But they have ways to verify your bank accounts, property, etc. If they catch you hiding things, your offer will be rejected immediately. Also make sure you keep filing and paying current taxes while your OIC is pending! That's another common reason they get rejected.

I went through the OIC process about 3 years ago with $89k in tax debt and successfully settled for $15k. The key things that helped me were: 1. Being completely transparent about my financial situation - I included EVERYTHING, even small bank accounts with minimal balances 2. Working with the Taxpayer Advocate Service (free!) when I got stuck on paperwork 3. Including detailed documentation of my expenses and why I couldn't pay the full amount 4. Being patient - the whole process took 11 months but was worth it One thing I wish I'd known earlier: if you qualify for the low-income certification, you don't have to pay the application fee or the initial payment with your offer. This saved me $205 plus the 20% down payment I would have had to include. Also, during the review process, make sure you respond to ANY requests for additional information immediately. They give you specific deadlines and missing them will kill your application. Given your situation with no assets and limited income, you actually have a decent shot at getting approved. The IRS knows they can't get blood from a stone. Just make sure your offer reflects what you can realistically pay based on their calculation methods.

These codes got me stressing so hard I started dreaming in numbers 🤣 The IRS needs to make this stuff easier to understand for regular folks istg

Been dealing with these codes for months and finally figured it out! Code 290 = they're adding tax/adjustments to your account (bad news usually), Code 291 = they're reducing/removing previous assessments (good news!). If you see both, it means they made an adjustment then partially or fully reversed it. The key is looking at the dates and amounts to see the timeline. Pro tip: the cycle dates next to these codes tell you when each action happened, so you can follow the story of what the IRS did to your return 📊