Thank you so much for mentioning the Fresh Start Program. I had no idea that existed. Do you think I should try to figure out which years I actually need to file before contacting them? Or should I just reach out and see what they say I need to do?

I'd recommend getting an understanding of your situation first before contacting them about Fresh Start. Request your tax transcripts for the past 6-10 years - this will show what income information the IRS already has on file for you. That way you'll be prepared for the conversation. As for which years to file, generally focus on the last 6 years as a priority. For years where your income was below the filing threshold (around $12,950 for 2022 as a single filer, but it varies by year and filing status), you might not technically be required to file - but there could be exceptions if you were self-employed or had certain other situations.

This is actually a really good point about refunds! When I finally caught up on my taxes, I was shocked to find out I was owed money for some years. But yeah, I lost out on the older refunds, which still hurts to think about.

Every time I try to use the IRS Free File options, I get partway through and then they tell me my situation is "too complicated" and try to upsell me. Does this actually work for claiming credits like the Retirement one?

Yes, it absolutely works for claiming the Retirement Savings Contribution Credit! The key is to start directly from the IRS.gov/freefile page rather than going to the tax company's main website. The versions of tax software available through the official IRS Free File program are different from the "free" versions advertised on the companies' own websites - they include all forms needed for most credits and deductions without upselling. Just make sure your income is under the threshold (currently $73,000) to qualify.

This is good advice - I just checked my W-2 and found a code D with $1,850 next to it that I never noticed before. Is that enough to qualify for this credit?

Can you explain more about how you track your mileage? I've been using a paper logbook but it's getting to be a pain. Is there an app you recommend that's IRS-compliant?

I use MileIQ for tracking all my business drives. It runs in the background on my phone and automatically detects when I'm driving. At the end of each trip, I just swipe right for business or left for personal. It creates IRS-compliant reports with timestamps, routes, mileage, and purpose fields. Before that, I tried Everlance and Stride, which are also good options. The key is finding one that's automatic enough that you'll actually use it consistently. The IRS wants to see regular documentation throughout the year, not something you created all at once at tax time. Whatever system you choose, make sure it captures date, starting point, destination, purpose of trip, and miles driven.

That sounds terrifying. Did you have to pay penalties or just the additional tax? I'm wondering how aggressive they are with these vehicle deduction issues.

Do you know if I could pay just enough to get under the $10k threshold and then set up a payment plan for the remainder to avoid the lien? Would that work?

Yes, that strategy can work! If you can pay enough to get your balance under $10,000 before you set up the installment agreement, you'll significantly reduce the chances of the IRS filing a lien. In your case, since you owe about $12k, you could pay around $2-3k upfront and then immediately request an installment agreement for the remaining balance. Make sure to get confirmation that the payment has been applied before you request the installment agreement. This approach isn't guaranteed to prevent a lien in all cases, but it follows their general guidelines and works in many situations.

Yes, you can absolutely still request penalty abatement even after receiving a CP504! The First Time Abatement (FTA) program applies regardless of what stage of collections you're in, as long as you meet the criteria: good compliance history (no significant penalties) for the three tax years prior to the year you received penalties. You'll want to call the IRS or include Form 843 with your request. I've seen numerous clients successfully get penalties removed even after receiving CP504 notices. Just make sure to address the underlying tax debt too, either by paying it or setting up an installment agreement.

Wait, this sounds serious. I don't have signature authority on any accounts in Ecuador, but since I'm sending money and receiving profits, could that count as having a "financial interest"? How would I know if I need to file this FBAR thing?

The definition of "financial interest" can be broad. If you have an arrangement where you're entitled to profits from the business, the IRS might consider you to have a financial interest in the accounts, even without signature authority. The safest approach would be to consult with a tax professional who specializes in international reporting. But generally, if you're investing in a business and receiving returns based on performance, you likely have a financial interest. If the total of all foreign accounts you have an interest in exceeds $10,000 at any point in the year, you'd need to file the FBAR. You might also need to look into Form 8938 (Statement of Specified Foreign Financial Assets) depending on the amounts involved. These are separate from your tax return and have different filing requirements and deadlines.

That approach could create more problems than it solves. The IRS looks at the substance of transactions, not just what you call them. If there's a pattern of you investing money and then receiving returns that correlate with business performance, relabeling them as "gifts" could be seen as tax evasion. While non-US persons can give gifts to US citizens without triggering gift tax for the recipient, unusual patterns of large gifts might trigger extra scrutiny. If audited, you'd need to prove these were genuine gifts with no expectation of return, which contradicts the investment arrangement described.