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I need some guidance on whether to go with a CPA or an Enrolled Agent for a complicated situation. My uncle hasn't filed taxes for about 12 years and is finally ready to get everything straightened out. He sold his condo back in 2018 and never reported the $45k profit, plus he's missing a bunch of his W-2s and 1099s from various jobs over the years. The IRS already sent him a notice for one of the years saying he owes around $2,700 (which he paid immediately). It's not like he was trying to commit fraud or anything - he immigrated here in his 50s and gets overwhelmed with the complexity of American taxes, plus he's had some anxiety issues that make him put off difficult paperwork. Now he's finally ready to clean this up, but I'm not sure if a CPA or an Enrolled Agent would be better for this kind of situation. I assume there will be penalties and back taxes due. Any advice on which professional would be better equipped to handle this mess?
Hey everyone, I just got this IRS Identity Verification Notice 5071C in the mail and I'm not sure what to do. Has anyone dealt with this before? What's the process like? I'm kinda freaking out here.
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.
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.
Hey everyone, I'm getting really frustrated with my tax refund situation. It was supposed to come on April 3rd, but I still haven't received anything. I tried calling the IRS, but I couldn't even get through to speak with anyone. Has anyone else experienced delays with their refund this year? Any advice on what I should do next?
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.
Hey everyone, I just got a 5071C letter from the IRS for identity verification. Has anyone dealt with this before? I'm not sure what to do next. Any advice would be appreciated!
Anyone else feel like theyre drowning in a sea of government bureaucracy? ππββοΈ Im in the same boat with a different IRS issue and its been months with no resolution.
Hey everyone, I'm trying to get my refund for 2024 and I'm hitting a wall. I got this transaction code 971 from the IRS. Anyone know what that means? I'm not sure if I should be worried or if this is just part of the process. Any help would be appreciated!
Have you checked your transcript online? Sometimes you can see more info there before you get the actual notice in the mail.
Taylor Chen
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.
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Grace Durand
AuthorThanks 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.
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Taylor Chen
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.
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Keith Davidson
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.
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Ezra Bates
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.
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