1 Which states allowed you to get certificates without registering? That might be exactly what we need. Also, did you have to file any returns in those states even though you were below threshold?

22 We were able to get certificates without full sales tax registration in Washington, Indiana, and Tennessee by specifically explaining our situation. Colorado and Arizona had simplified registration processes that didn't trigger filing requirements until we hit thresholds. No, we didn't have to file returns in those states as long as we remained under threshold. Just make sure to get written confirmation that no returns are required, as policies can vary and change. Each state required different documentation to prove we were below threshold. Tennessee was particularly accommodating once we explained the Avalara supplier situation.

23 This is so true! We're still filing zero returns in Illinois and Michigan two years after our sales dropped below threshold. The deregistration process is ridiculous - multiple forms, letters explaining why, and constant follow-ups. Not worth registering unless you're consistently above threshold.

Thanks for pointing that out! I'm getting married in December 2024, so I guess that means for the 2024 tax year (filing in 2025) I'll have to file either married joint or married separate. That definitely changes things. So it sounds like I should focus on whether I can claim my parents as dependents for my 2023 return that I'm about to file now, and possibly file as Head of Household for this year only? Then for next year I'll need to look at the married filing joint rules?

Exactly! For your 2023 return (filing now in 2024), you can potentially claim your parents and file HOH based on the advice others have given. For your 2024 return (filing in 2025), you'll need to file as either Married Filing Jointly or Married Filing Separately since you'll be married on December 31, 2024. You can still potentially claim your parents as dependents on a joint return if you continue providing more than half their support. The dependency rules don't change, but your filing status options do. The good news is that Married Filing Jointly typically gives you better tax rates than HOH anyway, so getting married might actually benefit you tax-wise if your future spouse has lower income or you benefit from combining deductions.

This is such a good point! My mom was on a special Medicare assistance program and when I claimed her as a dependent it messed up her qualification for the Extra Help program. We had to do some serious paperwork to get it straightened out.

So basically there's a built-in conflict because what's good for me tax-wise might be bad for the seller? That explains why they seemed annoyed when I asked for more to be allocated to physical assets. Is there some kind of standard breakdown that's typically used or is it really just a negotiation?

Exactly! It's a natural tension in the deal. You want more allocated to assets you can depreciate quickly (equipment, furniture) while they want more in goodwill or real estate which gets better tax treatment for sellers. There's no standard percentage breakdown that applies to all businesses. It depends on industry type, asset condition, and what's actually being transferred. A manufacturing business might have 60% in equipment while a service business might be 80% goodwill. The key is that the allocation should reasonably reflect actual fair market values - you can't just make up numbers that benefit both parties tax-wise.

In my experience, good business brokers will facilitate the discussion about allocation but won't actually determine the final numbers. They might provide ranges based on similar deals they've seen. The actual allocation usually gets hammered out between the buyer's and seller's accountants/tax advisors with input from both parties. It's definitely something you want professional help with rather than just accepting whatever the other side proposes.

Thank you so much for this detailed advice. I've never heard of Form 911 - does that require proof of hardship? And what kind of evidence would be most helpful to show I was kept in the dark? I don't have much documentation since I wasn't allowed to see financial records.

Form 911 does require showing hardship, but in your case, the potential tax bill of $247k on a $30k income absolutely qualifies as financial hardship. The Taxpayer Advocate Service is specifically designed to help in situations where the normal IRS processes would create significant difficulty. For evidence, anything that demonstrates the controlling nature of the relationship helps. This could include: statements from family/friends who witnessed the financial control, documentation of separate bank accounts you didn't have access to, emails/texts where you asked for financial information and were denied, or documentation from divorce proceedings that mentions financial control. Even a statement from a therapist (if you've discussed the financial abuse) can be valuable supporting evidence. The IRS doesn't expect extensive documentation in abuse cases - they understand documentation itself was often controlled.

The statute of limitations might not apply if returns weren't filed at all. The 10-year collection period doesn't start until a tax is assessed, and if no returns were filed, the assessment may not have happened until recently when the IRS created substitute returns.

You're absolutely right about the unfiled returns issue. If the ex never filed returns, the statute of limitations on collection wouldn't have started until the IRS prepared Substitute for Returns (SFRs) and made assessments based on those. The Currently Not Collectible status would still apply though. With a $30k income and basic living expenses, there's no way the IRS collection standards would show ability to pay on a $247k+ tax debt. This could at least provide immediate relief while pursuing the innocent spouse relief, which is definitely the best long-term solution in this case.

Safe deposit boxes aren't as secure as people think. My parents lost access to theirs when their bank suddenly closed the branch, and it was a nightmare getting their documents. Also, if you die without someone else having official access, the box gets sealed and your executor has to go through legal hoops to access it. Plus you can't quickly access stuff if you need it on evenings or weekends.

I hadn't considered the bank closure scenario - that's a good point. My branch has been open for decades so I guess I just assumed it would always be there. As for access issues, I've made sure my wife is listed as having access rights, so that should prevent problems if something happens to me. The weekend access limitation is real though - there have been a couple times when I needed something and had to wait until Monday. Maybe a hybrid approach would be better, keeping digital copies for immediate access and the physical originals in the safe deposit box.

Really appreciate the cybersecurity perspective! I'm not very tech savvy - is creating an encrypted zip file something a regular person can figure out? Or is it complicated? The encryption option sounds perfect if I can manage it.