That's actually really helpful to know! The full amount is a bit tough for me right now. How much is the interest rate if I go with a payment plan? And are there any specific issues with setting one up as an international student?

The interest rate is currently around 5% (it's the federal short-term rate plus 3%), and it's compounded daily. There's also a one-time setup fee of about $31 if you set up direct debit payments online. For international students, the main consideration is making sure you can complete all payments before your visa expires if you're planning to leave the US after graduation. Also, ensure your payment method will work internationally if you'll be making payments after returning to your home country.

Is that the same as the "substantial presence test" form? My tax software mentioned something about that but I wasn't sure if it applied to me.

I worked with Johnson Tax Law in Chicago and had a really good experience. They specialize in tax resolution and don't make unrealistic promises like some of the big advertised firms. They were upfront about costs and what could realistically be achieved.

That's a great point about the collection statute. Some of this debt is from 2018-2019, so not quite close to the 10-year mark yet. And thank you for the reminder about capital gains - I hadn't even thought about how liquidating stocks would affect this year's taxes. Definitely need to be strategic about that.

That's a great point that I hadn't even thought about! Did you find that the insurance increase was significant? And did you end up getting permits retroactively or did you have to make modifications to the structure?

My insurance went up about $240 annually, which wasn't too bad considering I had about $8,000 worth of equipment in there. The bigger surprise was that my property assessment increased after the county assessor noticed the new structure, which raised my property taxes by about $350/year. For the permits, I had to apply retroactively and pay a penalty fee (about $150 extra). I also had to make some modifications - mainly adding a specific type of smoke detector and upgrading the electrical work to meet code. The good news is that all of these costs were partially deductible for my business since I use the space 70% for business purposes.

Your CPA might be thinking about Section 179 expensing instead of regular depreciation. With Section 179, you might be able to deduct the full cost in the year you place it in service rather than depreciating over many years. There are limits though.

Do you know if the 110% rule applies to state taxes too? I've been using it for federal but never thought about state requirements.

The safe harbor rules vary by state. Many states follow the federal 110% rule, but some have their own requirements. California, for example, has a similar safe harbor rule but with some differences. New York follows the federal rules pretty closely. Check your specific state's tax department website for their safe harbor rules. Generally speaking though, most states have some form of safe harbor protection, and many do follow the federal 110% guideline for higher income taxpayers.

Which tax software did you switch to? I'm getting tired of all the unnecessary warnings in TurboTax too.

$1500 sounds way more reasonable than what I was quoted! Did they provide written documentation of their findings that you could use if you were ever audited?

Yes, they provided a comprehensive memo documenting their research and conclusions for each state. The document included citations to specific statutes, regulations, and rulings that supported their position. They also included a matrix showing taxability by state with color coding for high/medium/low risk areas. This became our "reasonable cause" defense documentation in case of audit, which protects against penalties (though not the underlying tax if you're found to owe it).

Voluntary disclosure agreements (VDAs) can be incredibly helpful if you think you've had past exposure. Most states limit the lookback period to 3-4 years instead of their full statute of limitations, and they'll typically waive penalties. They're relatively straightforward to set up - you can even apply anonymously through a representative in most states until you have certainty about the terms. I'd suggest starting with the states where you have the most sales before they find you through audit or data mining.