Can you get these transcripts if you haven't filed for several years? I thought your online access gets restricted if you're not in compliance?

You're right that online access might be restricted for non-filers. In that case, you can still get them by mail using Form 4506-T. It takes a few weeks but gives you exactly what income the IRS has on record. Even if your friend can't access his own transcripts directly, a tax professional with proper authorization (Form 2848 Power of Attorney) can access these transcripts on his behalf through the tax pro's account. This is another reason working with a professional is valuable in catch-up situations.

Did you get hit with huge penalties? I'm in a similar situation and I'm terrified of what I might owe with all the added penalties and interest.

Wait, so if these forms don't even exist anymore, why would my preparer mention using different forms? Now I'm really confused and wondering if I should find a new tax person. Do you have any suggestions for how to find a good tax preparer?

I'd be concerned if your preparer is actually referring to these outdated forms, as they haven't been used since 2017. They might be using simplified language to describe your tax situation, but it's a red flag if they're literally talking about filing these forms recently. For finding a good preparer, I recommend looking for an Enrolled Agent (EA) or CPA who specializes in individual taxes. Ask friends for recommendations, check Google reviews, and interview potential preparers before hiring. Ask questions like: How long have you been preparing taxes? What continuing education do you complete? How do you stay current with tax law changes? A good preparer should be able to clearly explain why your refunds differed and shouldn't mind questions.

Good point! I had something similar happen when I moved from Illinois to Indiana mid-year. The state portion made a massive difference.

This is really helpful, thank you! If I wait for the bill though, will I accumulate penalties and interest during that waiting period? And would this approach still work since I already have an existing installment agreement? I'm worried about defaulting on my current agreement.

You will accumulate some interest and penalties during the waiting period, but they're relatively small compared to the fees you're being quoted. For example, the failure-to-pay penalty is usually 0.5% of the unpaid tax per month. Since you already have an existing agreement, you might want to call the IRS directly to modify your current plan instead of setting up a new one online. Modifying an existing plan is typically easier and may have lower fees than creating a new one. Your current agreement won't default immediately - the IRS will typically send notices before taking any collection action.

Yes, I did this last year! If you're below the income threshold (about $33,975 for a single person in 2025), you can request the reduced fee. Just check the certification box in Part II of Form 9465. They didn't ask for any additional documentation - they just cross-reference with your tax return.

What happens if you already filed your taxes with the incorrect 1099-C amount? My tax preparer included it and now I realized it was an error. Am I screwed?

You're not screwed, but you'll need to file an amended return using Form 1040-X. First, get the corrected 1099-C from the issuer showing zero debt cancellation. Then file the amendment to remove that income from your tax return. If you've already paid tax on that phantom debt forgiveness, you'll get a refund of the difference. Just be sure to include a brief explanation with your 1040-X stating that you received a corrected 1099-C (and attach a copy of it). This should be a routine correction that won't trigger any issues.

That's a loan transfer, not debt cancellation! I had the exact same thing happen. File Form 8275 with your return and attach a statement explaining the loan wasn't cancelled but transferred. Include any documentation showing the new loan servicer has your debt (like statements from them). The IRS publication 4681 specifically addresses this - loan transfers aren't debt cancellation. Be super clear in your statement that "this was a transfer of debt to a new servicer, not debt cancellation as incorrectly reported on Form 1099-C." Also file a complaint with CFPB about the servicer.

Interesting approach! Do you know roughly what percentage of your self-employment tax gets covered by her additional withholding? And have you ever had issues with underpayment penalties this way?

We cover about 60% of my self-employment tax through her withholding. The remaining 40% I pay through quarterly payments, but they're much smaller and more manageable this way. We've never had underpayment penalties because the combination keeps us well above the safe harbor threshold (100% of last year's tax or 90% of current year). The key was finding the right balance - we started too high with her withholding and got a huge refund the first year, so we've adjusted downward since then.

This is actually really bad advice. If she claims both kids on her W-4 and the husband continues making the same quarterly payments, they'll likely be significantly underpaying their taxes. The quarterly payments were calibrated for just his income, not their combined income minus two child credits.