I hadn't thought about that option. Is the OIC process more complicated than setting up an installment agreement? And do they accept a lot of these offers or is it really difficult to qualify?

An OIC is definitely more complex than a standard installment agreement. You'll need to complete Form 656 and Form 433-A (OIC) with much more detailed financial information. The process typically takes 6-12 months for a decision. As for acceptance rates, they've improved in recent years. The IRS accepts about 40-45% of OICs submitted these days, which is much better than the historical 10-15% acceptance rate from years ago. The key is being realistic about what you offer - they use a formula based on assets, income, and expenses to determine the minimum they'll accept.

This is good advice. I was placed in CNC status for 2 years when I had a medical issue that wiped out my savings. The IRS reviewed my case after about 24 months and by then I was able to set up a reasonable installment plan. Without that breathing room I would have been completely underwater.

I tried using TurboTax last year and it was a disaster for my ITIN application. The software let me complete the W-7 form but didn't provide good instructions about the supporting documentation needed. My application was rejected because I didn't include certified copies of my ID documents. Ended up having to reapply manually.

I actually had a good experience with H&R Block in-person (not the software). They have Certifying Acceptance Agents at many locations who can verify your documents on the spot so you don't have to mail originals. Cost me extra but was worth it for peace of mind.

Oh wow, that's good to know! I was hoping to have mine before the tax filing deadline. Maybe I should consider using one of the Certifying Acceptance Agents people mentioned to speed things up? Did you mail in original documents or copies?

I mailed in certified copies (got them authenticated at my country's consulate) and that worked fine, but using a Certifying Acceptance Agent would definitely be faster. My friend used one and got his ITIN in about 8 weeks total. If you're planning to file taxes this coming season, I'd definitely recommend going with an agent rather than mailing everything yourself. The peace of mind is worth it, plus you keep all your original documents with you. The IRS is still catching up on backlogs, so anything you can do to make your application more straightforward will help speed things up.

Oh that's a good point - the property taxes are paid through the mortgage escrow. Would those be split between the estate and me in the same way as the interest? The property was reassessed after the inheritance too, so the taxes went up.

Yes, property taxes would typically be split the same way as the mortgage interest - based on when the mortgage was legally in your name versus the estate's name. However, since you were the legal owner of the property (the deed was in your name) earlier than the mortgage transfer, you might be able to claim all property taxes paid after the deed transfer regardless of whose name was on the mortgage. The property tax reassessment is actually important too - when you inherit property, you often get a "stepped-up basis" to the fair market value at the time of death, which affects your cost basis if you ever sell the property. Keep all documentation about the reassessment as you'll need that for future tax implications.

Did you have to file amended returns after getting the attorney involved? I'm in a similar mess with Wells Fargo and just got a corrected 1098 for last year, wondering if I need to amend.

Oh that's really helpful to know about Etsy! So for my own website sales, do I need separate sales tax permits for each state once I hit their thresholds? And how exactly do I remit the taxes I collect?

Yes, you'll need to register for sales tax permits in each state once you meet their economic nexus thresholds. For your own website sales, you'll be responsible for calculating the correct rate (which can vary by city/county within states), collecting it from customers, and then filing returns and submitting payment to each state. Filing frequencies vary by state and sometimes depend on your sales volume - some might require monthly filing while others are quarterly or annual. Most states now have online filing systems, but each works differently. Some states also require prepayment or bonding for new registrants, so plan ahead before you hit thresholds.

Yikes, what triggered the audit? Was it just random or did something specific catch their attention? I'm wondering what red flags to avoid.

What kind of penalty did they charge? Was it a percentage or just a flat fee? I have a similar situation but the W-2 is for only like $300.

They charged him a 20% accuracy-related penalty on the unpaid tax amount, plus interest that had accrued from the original filing deadline. The dollar amount wasn't huge because the income was small, but it was the principle and hassle that was the real cost. Even for $300, they'll still catch it through their matching program. The underreporter notice (CP2000) takes time to generate and send out, but it's an automated system that will eventually find even small discrepancies. Better to just include everything upfront than deal with the paperwork and potential flags on your account later.

Actually, if including the W-2 would result in a LARGER refund for you, the IRS won't penalize you - they just won't give you the additional refund unless you amend your return. The penalties are designed for when you underreport tax owed, not when you shortchange yourself. That said, they'll still send you a notice about the discrepancy. And if you repeatedly have mismatches on your returns, it could trigger more scrutiny in future years even if those mismatches were in the IRS's favor.