One thing nobody has mentioned yet - beware of the "Currently Not Collectible" status these companies often push. It might sound great (the IRS agrees not to collect from you temporarily), but the 10-year clock keeps running AND interest and penalties keep accumulating! Sometimes it makes more sense to set up even a small payment plan to start chipping away at the debt. For 2012-2014, if you haven't filed yet, file ASAP. The assessment date (which starts the 10-year clock) begins when you file and the IRS processes your return. So those years aren't even on the clock yet. I'd recommend calling the IRS Taxpayer Advocate Service. They're independent from the IRS collection division and can give you free guidance. Their number is 877-777-4778.

I'm dealing with a similar situation right now - owe about $28,000 for 2020-2022 and just got the levy notice last week. Reading through all these responses has been incredibly helpful, especially learning about the 10-year rule and how it actually works. I called one of those tax relief companies too and they wanted $3,200 upfront after a $500 "consultation fee." After reading everyone's experiences here, I'm definitely not going that route. Question for those who've been through this - how urgent is it really to act on the levy notice? Mine says "Final Notice - Intent to Levy" and gives me 30 days. I'm trying to decide between finding a local EA or attempting to call the IRS directly. The idea of waiting hours on hold is daunting, but the Claimyr service mentioned above sounds interesting if it actually works. Also, has anyone here actually had their bank account levied? I'm terrified they'll clean out my checking account before I can get this sorted out. We have about $3,000 in there which is basically our rent and grocery money for the month. Thanks everyone for sharing your real experiences - it's so much more helpful than the scary marketing from these tax relief companies.

Can I piggyback on this question with a related margin interest issue? If I use margin to buy both stocks and options, but only sell the options for a profit while keeping the stocks, can I deduct all the margin interest? Or only the portion related to the options I sold?

Just wanted to add a practical tip from my experience with a similar situation. When you're preparing your taxes, make sure you have good documentation of all your margin interest payments throughout the year. Your brokerage should provide this on your 1099-INT or in your monthly statements, but it's worth double-checking the totals. Also, keep in mind that if you have multiple brokerage accounts, you'll need to aggregate all your investment income and all your investment interest expenses across all accounts when completing Form 4952. The IRS looks at your total investment picture, not account by account. One more thing - if you're planning to continue using margin in future years, consider keeping a spreadsheet to track your margin interest payments monthly. This makes tax prep much easier and helps you project whether you'll have enough investment income to fully deduct the interest each year.

Just wanted to add my experience - we handled a similar situation differently. Our foreign investor (30% shareholder) paid some corporate expenses directly, and our CPA advised us to treat these as capital contributions rather than loans. The key factors in our decision were: 1. There was no expectation of repayment 2. No loan agreement was created at the time 3. The payments were relatively small (under $5k total) We documented this with a corporate resolution acknowledging the payments as capital contributions, which increased the shareholder's basis in the company. This was reported on line 19 of Part IV ("Capital contributions") instead of line 9 or 22. The approach you take really depends on whether there's an expectation of repayment or not.

I think everyone is overlooking the simplest approach here. When a foreign shareholder pays expenses on behalf of the corporation, you can treat this as a reimbursable expense. The corporation should record an account payable to the shareholder, and then when funds are available, reimburse them. This wouldn't need to be reported on Form 5472 at all if the reimbursement is done within a reasonable timeframe and at the exact amount (with no interest or other compensation). It's only when the arrangement becomes a long-term financing solution that it should be treated as a loan or capital contribution requiring 5472 reporting.

Just wanted to mention that you can actually e-file past year returns using some tax software, which is WAY easier than paper filing. I used FreeTaxUSA for my 2020 return when I filed in late 2023. They charge like $20 for past year returns but it was totally worth it to avoid the paper forms nightmare.

I'm going through a very similar situation right now with my 2020 taxes! Lost my job in March 2020 and honestly just couldn't deal with paperwork for the longest time. I finally gathered all my documents last month and realized I might actually owe money despite having taxes withheld from my W-2. One thing that really helped me was calling the IRS Taxpayer Advocate Service (TAS) - they're a separate division that helps people with complex tax problems for free. They don't file your return for you, but they can explain your options and help you understand what penalties you might face. The number is 1-877-777-4778. They were way more patient and helpful than trying to navigate the regular IRS phone system. Also, don't panic about the penalties if you do owe. The failure-to-file penalty stops accruing after 5 months, so it maxes out at 25% of what you owe. The failure-to-pay penalty continues but it's only 0.5% per month. Still not great, but not as scary as it sounds when people say "penalties keep growing forever.

Does anyone know if the financial institution you transfer the inherited 401k to matters? I've heard some places handle stretch IRAs better than others since the SECURE Act changes. I'm in a similar situation where I qualify as an eligible designated beneficiary (I'm disabled) but worried about choosing the right place to transfer my late husband's 401k.

I'm dealing with a very similar situation and wanted to share what I learned from my estate attorney. Since you're older than the original 401k owner, you definitely qualify as an "eligible designated beneficiary" under the SECURE Act exception for individuals not more than 10 years younger than the decedent. One thing that hasn't been mentioned yet - make sure when you do the rollover that it's titled correctly as an "inherited IRA" with both your name and the deceased's name (something like "Kaitlyn Otto as beneficiary of [deceased's name] IRA"). This is crucial for maintaining the tax-deferred status and ensuring you can take the stretch distributions properly. Also, since the original owner passed in 2022, you should have already started taking RMDs by December 31, 2023. If you missed that deadline, you may need to file Form 5329 to request a waiver of the 50% penalty, but the IRS has been more lenient with inherited account penalties during the transition period after the SECURE Act. I'd strongly recommend getting everything documented before you approach the financial institution, because as others have mentioned, many of them are still learning these rules themselves.