So when they say "voluntary tax system" that's basically BS right? Like they WILL come after you eventually? I always thought it was more like "we hope you'll pay but if you don't we might not notice" lol.

Voluntary tax" system means'you re expected to calculate and report your own taxes correctly without the government doing it for you first. It'doesn t mean taxes are optional! The IRS receives information from banks, employers, payment processors, etc., and their systems automatically match that information against filed returns. If you'haven t filed but they have records of your (income like 1099s from clients or bank)deposits , their automated systems will eventually flag your account for non-filing. Sometimes it takes years if'you re not on their radar, but digital records have made it much easier for them to catch non-filers. And once they do notice, they can go back indefinitely for unfiledyears.

I used FreeTaxUSA for 3 years of back taxes last year. Way cheaper than TurboTax and they keep prior year versions available. You just have to print and mail them in since you can't e-file prior years. Make sure you send them certified mail so you have proof of when you filed. Took about 9 weeks to process each return.

Thanks for this info! That's really helpful. Would it be better to wait until March then? Or is mid-February generally safe enough? I'm trying to balance getting it done early vs avoiding problems.

Mid-February is typically safe enough in my experience. By then, the IRS has usually worked out most of the early filing season kinks. March is completely fine too if you're not in a rush. Anytime between mid-February and the April deadline should give you smooth processing. Just make sure if you're filing a protective return that your statement is very clear about your intentions and the legal basis for your position. That clarity is more important than the exact filing date.

Yes, attaching a PDF statement works fine! I did this last year. Just make sure you title it clearly like "Form 1120-F Protective Filing Statement" and reference it somewhere in the return itself if possible. The IRS does look at properly labeled attachments.

Thanks for the suggestion. It wasn't identity theft - my dad knowingly let my sister use the card to help her out, so we can't go that route. He's on SSDI, not SSI, so that's somewhat reassuring. I'm still concerned about how this might impact his tax situation though, especially since he's normally not required to file due to low income. Does the 1099-C automatically mean he must file now, even with SSDI being his only income source?

If your dad is only receiving SSDI and is single, he generally wouldn't need to file a tax return unless his total income exceeds the standard deduction (which is $14,600 for 2024 if he's over 65). The 1099-C amount would count toward that threshold. So if his SSDI benefits plus the $8,200 canceled debt amount is less than the standard deduction, he still wouldn't be required to file. However, if it puts him over that threshold, then yes, he would need to file - but should definitely look into the insolvency exception in that case.

Form 8275 seems risky to me. I've heard it's like waving a red flag at the IRS saying "look at me!" Wouldn't it be better to just file Form 982 and only provide additional explanation if they actually question it?

That's interesting! So are you saying the IRS doesn't strictly apply the $1,470 monthly limit that the SSA uses? My daughter has Down syndrome and occasionally works more hours for special events, but we still provide over 90% of her support.

That's right - while the IRS and SSA both use the term "substantial gainful activity," the IRS focuses more on the overall support situation rather than rigidly applying the monthly earnings limit. If you're providing 90% of your daughter's support, you're well within the requirements to claim her as a dependent. The key test for the IRS is whether you provide more than half of your dependent's total support for the year. The SGA question becomes more relevant if they're earning enough that they might be supporting themselves. Even with occasional higher earnings for special events, it sounds like your situation clearly meets the support test.

There are different SGA thresholds for blind individuals versus non-blind individuals with disabilities. In 2023, the threshold was $2,460 per month for blind individuals and $1,470 for non-blind. Doesn't matter what type of disability otherwise - physical, cognitive, etc all fall under the same threshold as long as they're not blind.

Do these ghost preparers ever get caught? Seems like they're scamming a lot of people and the IRS should be all over this.

Yes, the IRS does prosecute these preparers when they catch them, but it's challenging because many operate informally through social media and don't leave much of a paper trail. They often use temporary contact information, prepaid phones, and don't properly sign returns as preparers. The IRS has been conducting a nationwide crackdown on fraudulent preparers, with some high-profile prosecutions resulting in prison time and heavy fines. However, they can't catch everyone, which is why they focus on educating taxpayers about the risks. Remember, even if a preparer completes your return, YOU are legally responsible for all information on it and any resulting penalties.

That's true, but most people making $78K like OP wouldn't qualify for EITC, right? I think there's an income limit that's much lower.