IRS
CommunityGovernment Services
Can't reach IRS? Claimyr calls for you, so you don't have to wait on hold.
Claimyr is a pay-as-you-go service. We do not charge a recurring subscription.
160,000+ people connected since 2021
Using Claimyr will:
- Connect you to a human agent at the IRS
- Skip the long phone menu
- Call the correct department
- Redial until on hold
- Forward a call to your phone with reduced hold time
- Give you free callbacks if the IRS drops your call
Ask the community...
- DO post questions about your issues.
- DO answer questions and support each other.
- DO post tips & tricks to help folks.
- DO NOT post call problems here - there is a support tab at the top for that :)
Need advice on Offer in Compromise for friend facing IRS tax debt - Fresh Start Program legit?
Hey everyone, I need some advice for a friend in a tough spot. She works as an independent contractor (1099) and just found out her fiancé never filed her taxes for 2022 and 2023 like he promised. She's looking into bankruptcy and her lawyer told her she needs to get current on tax filings first. For context, she made roughly $95,000 in 2022 (owing around $22,000) and about $125,000 in 2023 (probably owing $30,000+). I'm using basic calculators since I'm not a tax pro, but that's a lot of money she doesn't have right now. Her fiancé is now saying he's been looking into getting her tax debts completely forgiven because she can't pay. He claims she's been accepted (or will be) into something called a "Fresh Start Program." He says when they file her taxes, the person handling it will charge $4,500 to prepare everything and get the entire debt forgiven. I've been researching and found the IRS has an "Offer in Compromise" program, but it doesn't guarantee all debt will be wiped out. I also noticed she might qualify for first-time penalty abatement since she's accumulated penalties and interest. My questions: 1. Is there actually a "Fresh Start" program with the IRS? 2. Could she qualify for both OiC and first-time penalty abatement? 3. Can she pursue this while filing bankruptcy? (Her bankruptcy lawyer says it's fine, but I want to double-check) 4. Should she try to negotiate directly with the IRS herself, or is it worth paying someone $4,500 who claims they can make it all disappear? I'm skeptical that paying someone $4,500 means all your tax debt magically goes away. Any thoughts or advice would be super appreciated!
Join the conversation
Is my TIN and SSN the same number? Need help understanding IRS documents
So I just got my IRS transcript downloaded for the first time (dealing with some tax stuff from last year) and I noticed something weird. The last 4 digits of my TIN and SSN are exactly the same on the document. I wasn't sure if that's normal or if there's some kind of mistake on my transcript? Can TIN and SSN actually be the same number or should they be different? This is probably a stupid question but I've never really paid attention to this before and now I'm confused looking at my transcript. Thanks for any help!
Join the conversation
Just a side note - if you're not a U.S. citizen and don't qualify for an SSN, you might have an ITIN (Individual Taxpayer Identification Number) as your TIN instead. That's what I have as a resident alien, and it works similar to an SSN for tax purposes but can't be used for things like Social Security benefits.
How difficult was it to get your ITIN? I'm helping my cousin who just moved to the US and needs to file taxes next year.
The ITIN application process wasn't super difficult, but it did take some time. You need to complete Form W-7 and provide original documents or certified copies from the issuing agency (like a passport). You can submit it with your tax return or in advance. The processing time was about 7 weeks for me, but I've heard it can take longer during busy periods. One tip for your cousin: if possible, use an IRS-authorized Certifying Acceptance Agent instead of mailing original documents. That way they don't have to part with their passport for weeks while the IRS processes the application.
When I first got my tax documents sorted out, I was confused by all these different ID numbers too. Basically: - Regular employees: SSN = TIN - Non-US citizens without SSN: ITIN = TIN - Businesses: EIN = TIN - Adoption taxpayer: ATIN = TIN The TIN is just the generic term the IRS uses to refer to whichever number applies to your situation.
What about for a trust? My parents set one up and I'm trying to figure out the tax situation.
Do small royalty amounts go untaxed by the IRS?
My uncle keeps insisting that the $780 mineral royalty payments we receive quarterly from our grandparents' land trust are too small to bother reporting to the IRS. According to him, there's some kind of threshold where the government doesn't care about minor royalty income. I've been including mine on my returns every year, but he swears I'm wasting time because they're "below the radar" for tax purposes. I've tried searching online but can't find any official guidance that supports what he's saying. Has anyone else heard about small royalties being exempt from tax reporting? Or is my uncle just trying to justify not reporting his own income?
Join the conversation
My tax guy told me there's a $400 threshold for self-employment income but royalties are different - they're considered passive income and have to be reported regardless of amount. Been reporting my timber royalties for years even though they're less than $300/year.
Wait, is the $400 threshold for ALL income or just self-employment? I made about $350 last year doing some freelance work and didn't report it. Should I be worried???
The $400 threshold applies specifically to self-employment income, which is when you need to file Schedule SE and pay self-employment tax. But that's completely different from the requirement to report all income on your tax return. All income is technically required to be reported regardless of amount. The $400 threshold only determines whether you need to pay self-employment tax, not whether you need to report the income. For your freelance work, you should still report it on Schedule C even if it's under $400, but you wouldn't need to file Schedule SE or pay self-employment tax.
I just went through an audit because I didn't report $200 in royalties from a book I published years ago. Thought it was too small to matter but the IRS computer matched the 1099 to my return and flagged it. Cost me way more in penalties and time than if I'd just reported it. Don't risk it!
How did they even find such a small amount? Was it just because of the 1099? Now I'm worried about some small payments I've received...
Can I write off a new couch for my pet sitting business?
So I run this pet sitting service out of my home and we bring in roughly $16,000-$19,000 annually. The dogs we watch have absolutely destroyed our living room couch over the past year - there's scratch marks everywhere, pee stains that won't come out, and the cushions are basically shot from all the animals jumping on and off. We're looking at getting a new sofa that's specifically designed to be more pet-resistant (like with that outdoor fabric that repels water and doesn't catch fur). Since this couch would be primarily used in the space where we watch the animals for our business, can we deduct it as a business expense on our taxes? The pets are what ruined the old one and the new one would definitely be considered "necessary" for continuing our pet sitting business in our home. Not sure if it matters, but we use the living room about 80% for the pet sitting business and 20% for personal use. Any advice would be super appreciated!
Join the conversation
One thing nobody's mentioned - make sure you take pictures of the destroyed couch before you get rid of it! My accountant always tells me to document the condition of things I'm replacing for business reasons. Also keep the receipt for the new couch and maybe write a note on it about the business purpose. The IRS loves documentation if they ever question anything.
Do you think it would be better to just take the whole cost as a business expense? Like can't I just say it's 100% for the dog sitting since that's what ruined it? The living room is where all the dogs hang out during the day.
I wouldn't recommend claiming 100% business use if you actually use it for personal purposes too. The IRS specifically looks for people trying to deduct personal expenses as business ones. If you're honestly using it almost entirely for the business, you might be able to justify a higher percentage like 90%, but you should be truthful about any personal use. Better to take a slightly smaller legitimate deduction than risk problems with an audit by overreaching.
Has anyone considered buying the couch through their business directly? I have a separate business account for my lawn care service and I buy equipment that way - seems cleaner for tax purposes.
That approach doesn't actually change the tax treatment. Whether you use a business account or personal funds later reimbursed, the deductibility still depends on the business use percentage. The IRS cares about the actual use of the item, not which account you used to buy it.
Understanding Subpart F Income for International Tax Reporting
I'm trying to wrap my head around Subpart F income for my small business. We recently expanded operations to include a foreign subsidiary in Singapore, and I'm completely lost when it comes to reporting requirements. From what I understand, this income is taxable to US shareholders even if it's not distributed, but I'm confused about what exactly qualifies as Subpart F income for our situation. Our foreign entity primarily provides IT consulting services to Asian clients, but also holds some passive investments. My accountant mentioned something about the "de minimis rule" and "high-tax exception" but honestly I'm struggling to understand how these apply to our situation. Our Singapore subsidiary earned about $320,000 last year, with roughly $75,000 from passive investments. Do I need to report all of this as Subpart F income on my personal return as the majority shareholder? How do I calculate what portion is taxable immediately versus what can be deferred? Any real-world explanations would be incredibly helpful. Tax season is coming up fast and I'm getting anxious about getting this right.
Join the conversation
Don't forget about Form 5471! If you have a Controlled Foreign Corporation (which it sounds like you do), you'll need to file this form annually. The penalties for not filing are STEEP - $10,000 per form plus reductions in foreign tax credits. Make sure you're classifying your Singapore entity correctly and meeting all the reporting requirements.
Oh man, another form I need to worry about? Is Form 5471 something I can handle myself or is this definitely something I should have my accountant prepare? And are there any specific schedules within Form 5471 that relate to Subpart F income reporting?
I strongly recommend having your accountant prepare Form 5471. It's one of the most complex IRS forms with multiple schedules and detailed reporting requirements. Schedule I specifically reports Subpart F income and is where you'll need to break down those passive investment earnings. Schedule J tracks your E&P balances which affect future distributions. And don't forget Schedule P for tracking previously taxed earnings. Even experienced accountants sometimes struggle with this form, so it's definitely not something I'd suggest handling yourself, especially with the significant penalties for errors or omissions.
Just want to add that the Section 962 election could be worth considering if you're an individual shareholder. It lets you be taxed as if you were a corporation on Subpart F inclusions, potentially giving you access to the lower corporate tax rates and foreign tax credits that might otherwise be limited. The downside is complexity and potential double taxation when you eventually distribute the earnings.
Does making a 962 election make sense if most of the foreign income is already NOT Subpart F (like the consulting income mentioned)? Seems like it might create more complications than benefits in that case.
Beth Ford
I wanted to add something about that $4,500 fee your friend's fiancé mentioned. I'm a former tax preparer (not giving official advice), but that fee is WAY too high for what's likely needed in this case. A typical OiC application might cost $1,500-2,500 from a reputable tax professional, including preparing the unfiled returns. I'm concerned that: 1. The fiancé might be getting kickbacks from whoever he's referring her to 2. The professional is overcharging by promising "guaranteed" results 3. They might file a boilerplate OiC that has little chance of acceptance Remember that ANYONE can request an installment agreement or apply for an OiC - these aren't secret programs. The value in professional help is proper preparation and documentation, not access to "secret" programs. Also, I'd be concerned about the fiancé who promised to file her taxes and didn't. That's a major breach of trust, especially since it's causing penalties and interest to accumulate.
0 coins
Sergio Neal
AuthorThank you for this perspective! I've been really concerned about the high fee and the relationship dynamics. The fiancé has been handling her finances for a while and I'm definitely worried he's not acting in her best interest. Do you think she should separate the tax issue completely from him at this point?
0 coins
Beth Ford
Based on what you've shared, I would absolutely recommend she handle this separately from her fiancé. His track record isn't good - he failed to file her taxes for two years despite promising to do so, and now he's steering her toward an expensive service with unrealistic promises. This is a situation where she needs to take control of her own financial situation. She should consider getting a free consultation with a licensed EA (Enrolled Agent) or CPA who specializes in tax resolution to understand her real options. Many offer free initial consultations. She should go alone, without the fiancé, to ensure she gets unbiased advice.
0 coins
Morita Montoya
Just want to add one thing about bankruptcy and taxes - timing is SUPER important here. For income taxes to be dischargeable in bankruptcy: 1. The taxes must be income taxes 2. The due date for filing the tax return was at least 3 years ago 3. The tax return was filed at least 2 years before filing for bankruptcy 4. The tax assessment was made at least 240 days before filing bankruptcy 5. There was no fraud or willful evasion Since her taxes for 2022 and 2023 haven't even been filed yet, they almost certainly won't be dischargeable in bankruptcy. This means she'll still owe them after bankruptcy unless she uses OiC or another resolution method.
0 coins
Kingston Bellamy
So basically she needs to file ASAP to start that 2-year clock ticking? And if she does file for bankruptcy now, the tax debt will remain afterwards regardless?
0 coins