How does someone prove they're eligible for Head of Household status if they're audited? My tax guy always warns me about claiming this when I'm not 100% sure.

To prove Head of Household eligibility during an audit, you'd need documentation showing: 1) You paid more than half the costs of keeping up the home (rent/mortgage receipts, utility bills, grocery receipts, etc.), 2) You have a qualifying person who lived with you for more than half the year (school records, medical records, birth certificate for a child), and 3) You're unmarried or considered unmarried for tax purposes. It's definitely worth claiming if you qualify, as the tax benefits are substantial. The IRS mainly wants to see that you're financially responsible for the household and have a qualifying dependent. Keep good records of your expenses if you're concerned about potential audit risk.

Do they really check past filings before issuing refunds? I thought they just processed what you submitted for the current year.

What kind of detailed records do you recommend keeping? Is a credit card statement enough or do I need actual receipts for everything? I'm terrible at keeping track of paper receipts.

Credit card statements are a good start, but they're not enough on their own. The IRS wants to see the business purpose of each expense, which doesn't show up on credit card statements. I use a combination of methods - I take photos of paper receipts using an app that stores them digitally, save PDF receipts from online purchases, and maintain a spreadsheet where I note the business purpose of each purchase. For software subscriptions, I note what each one is used for in my business. The key information you need for each expense is: date, vendor, amount, what was purchased, and specific business purpose. Digital records are perfectly fine - you don't need to keep paper copies as long as your digital records show all this information.

What's this $2,500 threshold you mentioned? Does that mean I can deduct equipment purchases up to $2,500 immediately without depreciating them? That would be super helpful to know!

So how long does it typically take for the IRS to get the updated info from SSA after you get your new card? Is it immediate or is there like a delay of weeks/months?

It's usually not immediate. The SSA and IRS data synchronization typically happens within 2 weeks after your new card is issued, but in some cases it can take up to a month. However, you don't need to worry about the exact timing. Once you receive your new Social Security card with your updated name, that's your confirmation that the change is official with the SSA. For any tax filings after that point, you should use your new name as it appears on your card.

Is there any way around this? Like can she file a paper return with her married name instead of electronic filing? My sister had a similar issue.

Thanks for sharing your experience! Do you think having the previous counter offer will help his case? Also, did you have to provide any special documentation that might not be obvious?

The previous counter offer is absolutely golden - it shows the IRS was already willing to settle. He should definitely include all documentation from that previous interaction and reference it prominently in his new submission. As for non-obvious documentation, medical bills were huge in my case. The IRS allows for necessary medical expenses, but most people don't document them thoroughly enough. Have him gather EVERY prescription, doctor visit, and medical expense for the past year. Also, if he has any unusual expenses that aren't on the standard IRS forms (like caring for an elderly parent, special education needs for children, etc.), he needs to document these with receipts and explanations. The IRS can be surprisingly reasonable about legitimate unusual expenses if they're properly documented.

What tax software would you recommend for someone wanting to DIY an Offer in Compromise? Can regular software like TurboTax handle this or do you need something special?

I used TaxSlayer last year and it doesn't have OIC forms. Had to do those manually. Not sure about other programs though.

I looked into the IRS Direct File, but unfortunately it doesn't support Form 1065 for partnerships yet. I think they're still focusing on basic individual returns with some Schedule C support, but not the full partnership forms that I need to file. Would have been great if it was an option though! That's exactly the kind of solution I'm looking for.

You're right - I just double-checked and Form 1065 isn't included in their Direct File program yet. My mistake! I was thinking of Schedule C for sole proprietors. They're supposed to be expanding the program each year, so maybe it'll be an option for 2026 filing season. For now, it seems like your best options are either using one of the more affordable tax software options others have mentioned or e-filing your personal return and mailing in the Form 1065 separately.

This happened to me too! The IRS claimed they never received my mailed Form 1065 and I had no proof of mailing. Ended up paying over $800 in penalties. Certified mail with return receipt is absolutely worth the extra few dollars.

Yeah, the return receipt is key! I learned my lesson after that first disaster. Also, keep a complete copy of everything you mail them - all schedules, attachments, everything. They sometimes claim they received the form but not all the required schedules, which can also trigger penalties.