Is there a statute of limitations on back taxes? Like, if they haven't contacted me about unfiled taxes from 10 years ago, am I in the clear?

There's no statute of limitations for unfiled tax returns - the IRS can come after you at any time for returns that were never filed. However, once you do file, the general statute of limitations is 3 years for the IRS to audit or assess additional taxes (this extends to 6 years if you underreported your income by more than 25%). For refunds, you only have 3 years from the original due date to claim them. After that time passes, you lose the refund forever, even if you were owed money. That's why it's important to file, even years later - at minimum to start the statute of limitations clock and potentially claim refunds that aren't yet time-barred.

I used H&R Block for 4 years of back taxes and it was SO expensive - like $350 per year! In retrospect I should've just used software. Especially since they made a mistake on one of my returns that I had to fix anyway. Just make sure whatever you use has the right forms for your situation.

Exactly! My friend who runs a restaurant got convinced by one of these "specialists" to claim ERC based on dining capacity restrictions, which was legitimate. But then they pushed him to claim additional quarters when only OSHA guidance was in effect. Now he's worried about what will happen and the ERC company is nowhere to be found. They already took their 20% fee!

The IRS distinguishes between negligence (misunderstanding the law, making mistakes) and willful evasion (deliberately hiding income). From what I understand, most servers who underreport tips fall into the negligence category, especially if coworkers told them it was normal practice. Criminal charges typically only come into play with large-scale, deliberate tax evasion schemes. The IRS is much more interested in collecting the taxes owed than pursuing criminal charges against servers who come forward voluntarily to correct their returns.

Thanks so much for the clarification! That makes a lot of sense about the difference between negligence and willful evasion. My friend will be relieved to hear this explanation. I'll definitely suggest they file those amended returns sooner rather than later. Seems like being proactive about fixing the situation is way better than waiting for the IRS to discover it on their own.

I was in a similar spot last year (different job but same issue with unreported income). I handled it myself with Form 1040-X and a letter explaining my situation. It wasn't that complicated tbh, and I probably saved like $2000 by not hiring a professional. As long as you're willing to gather your income info and fill out some forms, you can probably DIY this.

Thanks for sharing your experience! That's really helpful to know. I'll probably try to handle it myself first and save the money. Did you use any specific tax software to help with the amended returns or just fill out the forms directly?

Thanks for this advice! I hadn't thought about the income phase-out limits. My parents definitely make well over the threshold you mentioned. They're in the higher tax brackets so they might not even get much benefit. I'll try showing her how much more I'd get from the credit compared to what she'd get. It's not about taking something from them - it's about maximizing what we get back as a family overall. I think presenting it that way might help!

This is important! My cousin and her mom both tried to claim the same education expenses last year (similar situation, not a dependent) and BOTH their returns got flagged. The IRS ended up auditing both of them, and her mom had to pay back the credit plus penalties. Definitely not worth the headache.

12 That's absolutely incorrect. The January 31st deadline is a hard deadline set by the IRS, not a "soft" one. Employers are required by law to provide W-2s to employees by January 31st, and they must also file copies with the Social Security Administration by this date. The February 15th date your employer mentioned might be getting confused with another tax deadline - that's when the IRS suggests you should follow up if you haven't received your W-2 yet. It's not an extended deadline for employers to issue W-2s. Your employer is providing misinformation. They are already late and potentially subject to penalties. I would recommend politely correcting them by referring to the official IRS guidelines and asking when you can expect to receive your W-2.

5 Thanks for confirming it's BS! I figured as much but wanted to make sure. I'll forward them the IRS guidelines and see if that helps speed things up. My boss likes to make up his own rules so I'm not surprised.

3 Does using Form 4852 trigger any kind of audit or extra scrutiny from the IRS? I'm worried about raising red flags.