Accountant made MASSIVE error on 2022 Taxes, now I owe $6000 I can't afford

As a tax resolution specialist, I see situations like this more often than you might think. First, take a deep breath - you do have options here. The accountant admitting fault is actually significant. While they may not be legally obligated to pay the tax itself (only the penalties and interest in most cases), you could potentially have a professional malpractice claim. The standard in the industry is that professionals should pay for mistakes that were their fault. For the immediate tax issue, you should: 1) Request an installment agreement with the IRS. Given your current financial hardship, you might qualify for a partial payment plan where you pay what you can afford monthly. 2) Look into Currently Not Collectible status if you truly have no ability to pay right now. 3) For the state tax debt, similar hardship programs exist but vary by state. Since you're filing bankruptcy, make sure your attorney knows about this tax debt. Certain income tax debts can be discharged in bankruptcy if they meet specific criteria (generally, they're over 3 years old, the return was filed at least 2 years ago, and the assessment is at least 240 days old). Document everything related to the accountant's admission of fault. This could be important for both the IRS negotiations and any potential claim against the accountant.

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I was super skeptical about taxr.ai when I first heard about it, but after getting hit with an IRS notice for a 1099 my accountant missed, I decided to try it. Uploaded all my documents from the previous year and it immediately flagged the missing form! What really helped was the detailed explanation of how the mistake affected my taxes and what I needed to do to fix it. I was able to file an amended return with confidence instead of panicking. Their system also found a deduction my accountant missed that saved me about $400. For anyone dealing with accountant mistakes or worried about missing something on your taxes, it's definitely worth checking out. I'm actually handling my own taxes again this year because I feel much more confident with their system backing me up.

Your situation sounds awful! I've been there with the IRS breathing down my neck. What helped me was using Claimyr to actually get through to a real IRS agent - https://claimyr.com I spent WEEKS trying to call the IRS about a payment plan after my preparer messed up my taxes. Kept getting the "call volume too high" message or would wait for hours only to get disconnected. Claimyr got me connected to a real agent in under 45 minutes instead of the normal 3+ hour wait (if you can even get in the queue). I was able to explain my hardship situation directly to the agent and got set up with a payment plan I could actually afford. They also have a demo video that shows exactly how it works: https://youtu.be/_kiP6q8DX5c Seriously, being able to actually talk to someone at the IRS made all the difference in getting this resolved. The agent was surprisingly helpful once I could actually reach one!

I can't believe I'm saying this, but I tried Claimyr after posting that skeptical comment. I was desperate after getting nowhere with the IRS for two weeks straight. Got connected to an agent in about 30 minutes and managed to get on a hardship payment plan for my tax bill. The agent explained that with my documented income situation, I qualified for Currently Not Collectible status, which means they're not actively trying to collect while I'm in financial hardship. Would have NEVER known about this option if I hadn't actually spoken to someone. The fee was way less than what I was stressing about and definitely less than what I would have paid in increased penalties while waiting to get through. Sometimes you have to spend a little to save a lot I guess.

You might want to file a complaint with your state's board of accountancy. CPAs are licensed professionals and there are standards they have to meet. The fact that he admitted fault means he knows he screwed up badly. Also, check if your accountant has professional liability insurance. Most do, and this is EXACTLY what it's for. Don't let him off the hook by just paying the penalties - his insurance should cover the actual tax bill too since his error caused this problem.

Surprised nobody mentioned this, but you should file Form 843 with the IRS requesting abatement of penalties due to reasonable cause. Since you have proof the accountant had all docs and they admitted fault, you have a strong case. Include a letter from the accountant admitting the error. You still owe the taxes, but might get all penalties and interest removed. Also, file an amended return ASAP to stop additional interest from accruing.