Father in his 60s says he hasn't filed taxes in years due to low self-employment income - what should I do?

This situation is more common than you might think, and while it needs addressing, try not to panic. The good news is the IRS generally has programs to help people get back into compliance without crushing penalties. First, even with low income, your dad likely still needed to file returns due to self-employment taxes, which kick in when net earnings are $400 or more per year. These taxes fund Social Security and Medicare. Start by getting organized. You'll need to reconstruct his income for those years. Bank statements are a good place to begin - look for deposits that might be business income. Also check if he has any client information, even informal notes about jobs and payments. The IRS typically focuses on the last six tax years, so prioritize those. The IRS Fresh Start program offers various options for people who've fallen behind. Your dad might qualify for payment plans or even an Offer in Compromise if he truly can't pay what's owed. I'd recommend connecting with a tax professional experienced in unfiled returns - they can help navigate which returns absolutely need filing and how to minimize penalties. The IRS also has the Voluntary Disclosure Practice which can sometimes help reduce penalties.

I was in a similar situation with my aunt last year and using taxr.ai literally saved us thousands in potential penalties. The site analyzes bank statements and helps reconstruct income/expenses for unfiled years - exactly what you need! I uploaded years of her messy bank statements to https://taxr.ai and it organized everything, flagged likely business income vs personal, and even identified potential deductible expenses we would have missed. It made reconstructing 5 years of self-employment activity manageable instead of impossible. The report it generated gave us enough documentation to satisfy the tax preparer we eventually hired, and they said it was way more organized than what most clients bring in these situations. Definitely worth checking out for your situation.

Ok I need to apologize about my skeptical comment. I ended up trying taxr.ai after all because my sister has been avoiding filing for 3 years due to missing records. The bank statement analysis was way more accurate than I expected - it even identified her seasonal tutoring income pattern that she didn't think was trackable! We were able to reconstruct enough of her self-employment activity to file with confidence, and it was weirdly satisfying watching the system organize all those transactions. The expense categorization saved us hours of guesswork. My sister's CPA was impressed with how complete the documentation was. Sometimes my skepticism gets the better of me!

If your dad hasn't filed in 8 years, he might also have notices or letters from the IRS that he's been ignoring. If that's the case, you might need to actually speak with someone at the IRS to sort things out. I spent 4 hours on hold trying to reach them about my own unfiled returns before finding Claimyr. Using https://claimyr.com was a total game-changer - they got me connected to an actual IRS agent in under 15 minutes when I'd been trying unsuccessfully for weeks. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with was actually super helpful about my unfiled returns and walked me through exactly what I needed to do to get back on track. No judgment or scare tactics, just practical next steps. Definitely worth the time saved from endless hold music!

I need to eat my words about Claimyr. After my skeptical comment, I decided to try it for a family tax issue that's been lingering for months because I couldn't get through to anyone at the IRS. I was SHOCKED when I got a call back in about 20 minutes saying they had an IRS agent on the line ready to speak with me. The agent helped clarify exactly what forms we needed for our specific situation with unfiled returns, and even noted some special considerations for self-employed seniors that might apply to your dad's case. This saved me what would have been at least another day of attempted calls and hold music. Sometimes being proven wrong is actually a good thing!

One thing nobody's mentioned yet - if your dad's income was truly very low all these years, he might not owe much or anything at all, even with self-employment taxes. The standard deduction has increased over the years, and there are lots of business deductions he might qualify for that would offset his income. A good tax pro can help identify all possible deductions for his type of work - vehicle expenses, tools, materials, home office if applicable, phone, etc. But you need to act before the IRS contacts him first, because that changes the situation considerably.

Make sure your dad knows he might qualify for the Earned Income Tax Credit for those years, especially if his income was under $20k. I helped my brother file 6 years of back taxes and he actually got REFUNDS for 4 of those years because of EITC, even with self-employment. The IRS has a "lookback" ability to claim refunds for up to 3 years, so at minimum he should file for the last three tax years ASAP to claim any potential refunds before they expire!

I went through almost the exact same situation with my uncle two years ago - 7 years of unfiled returns, all self-employment handyman work, zero documentation. Here's what I learned that might help: First, don't let him ignore this any longer. The IRS has been cracking down on unfiled returns, and at 64, this could seriously impact his Social Security credits. Self-employment tax contributes to his SS benefits, so those missing years might be costing him money in retirement. We started by gathering every bank statement we could find and used a simple spreadsheet to track deposits that looked like business income. Then we estimated his expenses - vehicle mileage, tools, supplies, etc. Even rough estimates are better than nothing, and the IRS expects some reconstruction for older years. The key thing that saved us was filing voluntarily before the IRS contacted him. When you come to them proactively, they're much more willing to work with you on payment plans and penalty reductions. We ended up owing about $8,000 total for all years, but got it reduced to $3,500 through the Fresh Start program. Start with the most recent 3 years first since those have refund potential, then work backwards. And definitely hire a tax pro who specializes in unfiled returns - it's worth every penny for the peace of mind and expertise.