Did they ever come to your house or anything? That's what I'm worried about. Also did it affect your credit score?

They never came to my house - that's pretty rare unless you're being investigated for tax fraud involving large amounts of money or criminal activity. The IRS generally handles everything through mail notices and phone calls before taking more serious collection actions. It absolutely destroyed my credit score for years. The tax liens showed up on my credit report and dropped my score by over 100 points. This affected my ability to get apartments, car loans, and credit cards. Even after I paid everything off, the damage lingered for a while. The credit reporting rules have changed somewhat since then, but tax problems can still indirectly affect your credit when they impact your financial situation.

Wait so if I file for an extension I still need to pay what I think I might owe? How do I even calculate that without my W-2??

Yes, you're expected to make a good-faith estimate of what you might owe and pay that amount when you file the extension. Without your W-2, you can estimate based on your final paystub of the year, which usually has year-to-date information. Most paystubs show how much federal tax was withheld throughout the year. If you don't have your last paystub, you could also estimate based on last year's return if your income situation was similar, or check your bank deposits to calculate approximately what you earned and estimate taxes from there. Even if your estimate isn't perfect, showing that you made a reasonable effort to comply will usually help reduce penalties.

That's really helpful - I was so focused on figuring out the correct amount that I hadn't thought about the deadline. The notice says I have 30 days to respond. If I request more time, does that stop any collection actions they might take?

Requesting more time usually pauses collection actions while your case is being reviewed, but it's not guaranteed. Make sure you get confirmation (ask for a transaction ID or confirmation number) when you request the extension. The safest approach is to send a written response by certified mail before the deadline stating that you're disputing the amount and gathering documentation to support your position. This officially stops the collections process while your case is reviewed. Then follow up with your complete documentation once you have everything organized.

If the error was the IRS's fault, you can request interest abatement using Form 843. I did this last year after they misapplied a payment, and they approved it and removed all the interest charges. Make sure you clearly explain how the error was caused by the IRS and not by anything you did.

Thanks for this suggestion! I actually tried asking if they would accept proof of application but they were pretty firm about needing the actual ITIN before finalizing the lease. I didn't think about the occupant vs. lease-holder distinction though - that's a really good idea. I'll check if my income alone meets their requirements. The only concern is that many places have rules about all adults living in the unit being on the lease. I'll definitely bring this up with them tomorrow. Really appreciate the suggestion!

They use it for identity verification and for potential collections if you break the lease. Without an ITIN or SSN, they have no way to report to credit bureaus or track you down if you skip out on rent. Some places will accept a larger security deposit instead.

That makes sense, thank you. I hadn't considered the collections angle. I wonder if offering an additional security deposit might work in the original poster's case. Seems like that would address their concern about potential risk.

I thought Solo 401ks were only for self-employed individuals without employees. Doesn't an S-Corp usually have at least the owner as an employee? Would this still work if the owner is the only employee?

You're right to question this - I should have been more specific. A Solo 401k can work for an S-Corp if the only employees are the owner (and potentially their spouse). If the S-Corp has any other W-2 employees who work more than 1,000 hours per year, then you'd need a regular 401k plan with non-discrimination testing. If OP only has themselves (and possibly their spouse) as employees, then the Solo 401k is still an option and could allow for higher contribution limits than a SEP IRA in many cases, especially when you consider both the employer and employee contribution components.

Not a dumb question at all, but with an S-Corp, the home office deduction works differently than for sole proprietors. The corporation should reimburse you for the home office expenses rather than taking them directly on your personal return. The S-Corp can deduct the reimbursement and it's not taxable income to you if done correctly.

Oh no, I hadn't even thought about state taxes! We're in New York - do you know if they follow the federal rules for foreign income or have their own system? This is getting more complicated by the minute.

New York generally follows federal rules for income inclusion, so if you're reporting the rental income on your federal Schedule E, you'll need to include it on your NY return too. The one benefit is that NY does allow credits for foreign taxes paid, similar to the federal system. Some states like Nevada or Florida might be more advantageous for people with significant foreign income since they don't have state income tax. But for now, plan on reporting that Belgian rental income on both federal and NY returns.

Good point! Though I think Form 8833 is only required if you're taking a position that's contrary to the treaty or if you're claiming the treaty overrides an internal US law. Not everyone with foreign property needs it.