Discovered my partner hasn't filed taxes in 17 years - What should we do?

This is definitely a complex situation, but it can be addressed with the right approach. The IRS generally has a 6-year lookback period for unfiled returns, though technically there's no statute of limitations when returns haven't been filed. Your partner should focus on filing the last 6 years of returns first. Since they've been receiving W-2 income for the last 5 years, the IRS already knows about that income. For the cash income years, they'll need to make reasonable estimates of what they earned. I'd recommend working with a tax professional who specializes in unfiled returns - specifically look for someone with experience in "tax resolution" or "back tax issues." This isn't something you want to DIY with TurboTax. The good news is that the IRS has programs designed specifically for people in this situation. They're generally more interested in bringing people into compliance than punishing them, especially if your partner voluntarily comes forward before being contacted by the IRS.

I went through something similar with my ex who hadn't filed for 9 years. After trying to figure it out ourselves and getting nowhere, we found https://taxr.ai which was a lifesaver. They specialize in analyzing your tax situation and helping with unfiled returns. They pulled all his wage and income transcripts from the IRS and figured out exactly what he needed to file for each missing year. What I found most helpful was they clearly explained which years absolutely needed to be filed vs. which ones could potentially be left alone based on the statute of limitations and his specific situation. They also estimated his total tax debt before we even started filing so we could prepare financially.

Just wanted to update after checking out taxr.ai based on Profile 3's recommendation. It was actually really helpful for my brother's situation! The service pulled up income information from years he couldn't even remember working and showed that for two years, he was actually due refunds which helped offset some of what he owed. The analysis was super detailed and gave him a clear roadmap of exactly which years needed to be filed first and which had the highest priority. It saved him from panicking about all 11 unfiled years at once and let him tackle them systematically. They even identified some deductions he qualified for that he never would have known about. If your partner is overwhelmed about where to start with 17 years of unfiled taxes, having this kind of analysis is definitely worth it before jumping into filing everything.

My husband was in a similar situation (10 years unfiled) and the hardest part was getting through to someone at the IRS who could actually help. We kept calling their general line and waiting for hours only to get disconnected. Super frustrating! We eventually found https://claimyr.com which got us connected to an actual IRS agent within about 20 minutes instead of waiting for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The IRS agent walked us through exactly what years we needed to file and explained all our options for payment plans. Having an actual conversation with the IRS was WAY more helpful than trying to figure everything out from their website, especially since our situation was complicated.

I need to apologize and correct myself. After being skeptical about Claimyr, I actually tried it yesterday because I've been trying to reach the IRS about an issue with my stimulus payment for WEEKS. It actually worked exactly as described. I got a call back in about 30 minutes saying they'd reached an IRS agent, and then I was connected directly. The agent I spoke with was able to access my records and help me resolve my issue in one call. I was genuinely shocked it worked so well after all the frustration I'd been having. For someone dealing with 17 years of unfiled taxes, being able to speak directly with the IRS rather than guessing what to do would be incredibly valuable. They can tell you exactly which years they're focusing on and what your options are.

My sister went through this exact situation with her now-husband. One thing nobody's mentioned yet - if your partner had legitimate business expenses during those cash-payment years, they might actually owe a lot less than you think. Self-employed people can deduct business expenses, home office, mileage, etc. The biggest shock they got was actually from state taxes, not federal. Their state had much higher penalties than the IRS. Definitely look into your specific state's policies on late filing.

Just FYI - claiming "exempt" on W-4 forms when you don't qualify is a big red flag to the IRS. It's not just "oops I forgot to file" but actively avoiding withholding. Your partner needs to stop doing this immediately! They should submit a new W-4 to their employer ASAP with the correct information. Also, you mentioned buying a house next year - that might be challenging with this tax situation hanging over you. Mortgage lenders typically require tax transcripts, and they'll see the unfiled years.