How do you qualify for their help? Do you need to show proof of hardship or something? My CP2000 is for $4k and there's no way I can pay that right now.

You need to demonstrate that the tax issue is causing you significant financial difficulty or that the normal IRS processes aren't working correctly in your case. Examples would be if paying the amount would prevent you from affording necessary living expenses or if you've made multiple attempts to resolve the issue through normal channels without success. You can call them directly or fill out Form 911 (Request for Taxpayer Advocate Service Assistance). You'll need to explain your hardship situation clearly. For your $4k situation, if paying that would prevent you from paying rent, utilities, or medical expenses, that could qualify. They can sometimes help set up manageable payment plans or put a temporary hold on collection activities.

I used the payment plan last year. It was actually pretty straightforward. You can set it up online for smaller amounts or by phone/mail for larger ones. Interest still accrues but the penalties are much less. I did $100/month and it was manageable.

I amended my 2022 return to claim the Lifetime Learning Credit for past tuition I paid that year. Got about $1,100 back. Definitely worth it but took about 5 months to process. Just make sure you're within the 3-year window for amendments.

This! I made this mistake and it triggered an audit. Had to provide detailed documentation showing what portion of my collections payment was actually for tuition versus housing charges. Ended up having to pay back part of the credit plus interest.

Absolutely right. The IRS is pretty specific about what counts as a qualified education expense. Tuition and required course materials are in, but optional expenses are out. Another thing to watch for is if your tuition was paid by any grants or scholarships (even in previous years). If the school applied those to your tuition and what went to collections was actually your housing bill, you might be out of luck for education credits.

That's exactly what I'm worried about - spending all this money on the setup only to find out the tax benefits are minimal. Did you find any particular jurisdiction or structure that worked better than others? And any broker recommendations that actually accept these kinds of entities?

I eventually switched from Belize to a Seychelles structure which had slightly better terms for satisfying economic substance requirements with algorithmic trading. The key is finding a jurisdiction that clearly classifies algorithmic trading as "active business income" rather than passive investment income. For brokers, I had good experiences with two firms based in St. Vincent and the Grenadines that specifically work with trading companies. They had reasonable documentation requirements and stable platforms. Just be careful - many foreign brokers have great leverage terms but terrible execution quality or withdrawal issues. Always test with small amounts first.

Did you try any of the digital banking solutions specifically for trading companies? I've heard there are some in Lithuania and Estonia that specialize in this.

The 9 month marriage requirement isn't always needed. If the death was accidental or occurred in the line of duty as an active member of the armed forces, the 9-month requirement is waived. Also, if they have a child together, that can change the requirements too.

Thanks for this suggestion! I just looked into the Streamlined Procedures and it seems like I might qualify. My attorney mentioned something similar but called it by a different name and was talking about a much smaller reduction. Do you know if I need a specialized attorney for this or if it's something I can handle myself? The legal fees are adding up fast.

You don't absolutely need an attorney to apply for the Streamlined program, but I'd recommend at least a consultation with someone who specializes in international tax issues. The program requires a detailed narrative explaining why your failure to report was non-willful, and that narrative is critical to acceptance. If your current attorney isn't giving you clear information about the Streamlined program (it's very well-established), you might want to get a second opinion. Many tax attorneys offer free initial consultations, so you could shop around. The penalties at stake are significant enough that good representation is worth it, but you shouldn't be paying for an attorney who isn't experienced with exactly this type of situation.

Is there a time limit on how long the IRS can come after you for these foreign reporting issues? I'm worried now because I inherited a small property in Italy from my grandparents 4 years ago and never reported anything...