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Don't overthink this - for unfiled taxes, DEFINITELY an EA. CPA is overkill. But make sure your uncle knows he'll likely need to pay not just for the professional help but also potentially significant penalties and interest. The sooner he addresses this, the better.
Thanks for the straight answer. Do you have any idea what range of penalties we might be looking at for the unreported house sale? That's the part that worries me the most.
The penalties will depend on several factors, but generally: - Failure-to-file penalty: about 5% of unpaid taxes per month, up to 25% - Failure-to-pay penalty: about 0.5% per month, up to 25% - Interest on unpaid taxes: varies based on federal rates For the house sale specifically, if it was his primary residence and he lived there at least 2 of the 5 years before selling, he might qualify for an exclusion (up to $250k for single, $500k married) which could mean no tax due on that specifically. The good news is that the IRS does have programs for abating penalties in some cases. A good EA will know exactly which relief programs your uncle might qualify for. Since it wasn't intentional and there was a language barrier, there might be some options.
Hate to be that person, but if he deliberately sold a house and didn't report it, that's not a "language barrier" issue... that's tax evasion. He should talk to a tax attorney, not just an EA or CPA.
That's a bit harsh. Plenty of people don't understand that home sales need to be reported, especially if English isn't their first language. Not everyone who makes a tax mistake is committing deliberate evasion.
Just went thru this last month. My advice: gather ALL your docs before you start the process. I had to restart cuz I was missing some info and it was super frustrating. Also, if you filed jointly, make sure your spouse is available too - they asked questions only he could answer.
Thanks for the heads up! I'll make sure to have everything ready before I start. Did you do it online or by phone?
I did it online. It was actually pretty quick once I had all the right info. Good luck!
PSA: Be careful of scams related to this! I've heard of people getting calls or emails claiming to be the IRS and asking for personal info. ALWAYS go through the official IRS website or call them directly using the number on your notice.
š This! My grandma almost fell for one of these scams. They're getting really sophisticated.
Good lookin out! These scammers are vultures š¦
Pro tip: if you're really desperate, try contacting your local Taxpayer Advocate Service. They can sometimes help if you're experiencing financial hardship due to refund delays.
guys i think i figurd it out. we need to sacrafice a goat to the irs gods. its the only way to appease them and get are refunds ššŖšø
Instructions unclear. Sacrificed my bank account instead. Still no refund. Send help. š
This is the quality content I come to Reddit for š
Anyone else feel like theyre drowning in a sea of government bureaucracy? ššāāļø Im in the same boat with a different IRS issue and its been months with no resolution.
Tell me about it! I've been trying to get my 2019 refund sorted for over a year now. It's like shouting into the void.
Hang in there, guys! It sucks, but eventually they do sort things out. Just keep good records of all your communications.
Evelyn Kim
I'm literally going through this exact situation right now. Hadn't filed since 2020 and just got everything submitted last month. Here's what happened: - No jail time (they save that for actual tax fraud not just being behind) - Had to pay about $1,200 in penalties and interest - But I also got back $3,400 in refunds from two of the years - Net positive of $2,200! Just GET IT DONE. The anxiety of not knowing is wayyy worse than the actual consequences. I used a CPA and it cost about $350 per year but worth every penny for the peace of mind.
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Diego Fisher
ā¢Wait you can actually get refunds from previous years still? I thought there was a time limit?
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Henrietta Beasley
Make sure you file all the missing years at the same time if possible. I made the mistake of filing one year at a time and the IRS systems got confused - they put a hold on my most recent return because they were still processing my prior years, which delayed everything by months. Also if you do end up owing, ask about a First Time Penalty Abatement. If you've had a clean record before this, they might waive some penalties (but not the interest).
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