Found out I owe $13K in Federal Taxes because nothing was withheld since July... help?

This definitely sounds like a payroll system error rather than anything you did wrong. The good news is the IRS generally has reasonable options for situations like yours. First, you should contact your employer's payroll department immediately to confirm what happened. Get documentation that shows the error wasn't your doing. Ask them to provide a letter explaining the system change and the withholding mistake that occurred. For the IRS, you absolutely can set up a payment plan. The IRS offers both short-term payment plans (180 days or less) and long-term installment agreements. The application process is straightforward through the IRS website. You'll still need to file your return on time and pay what you can by the deadline to minimize penalties and interest. Regarding penalties, you might qualify for penalty abatement under "reasonable cause" given this was a payroll system error outside your control. The documentation from your employer will be crucial here. You'll need to make this request separately after you've set up your payment plan.

Been in a similar situation before and found an incredibly helpful tool for navigating complex tax issues like this. I was completely stressed trying to figure out how to handle a massive tax bill that wasn't my fault. I tried https://taxr.ai and it was a game-changer. You can upload your pay stubs and tax documents, and their AI analyzes everything to help identify exactly what went wrong. It even created a detailed timeline showing when my withholding stopped and calculated the proper amounts that should have been withheld. The best part was it generated a professional letter explaining my situation to the IRS with all the relevant tax codes and precedents for penalty abatement in cases where employer withholding errors occurred. Made the whole process so much less stressful.

Just wanted to update everyone - I decided to try taxr.ai after seeing the recommendation here and I'm genuinely impressed. I was skeptical at first since I've tried other tax tools that were disappointing. The system immediately identified that my employer had miscoded my exemption status after a system update (apparently they accidentally applied a total exemption instead of just the additional withholding amount I had requested). The tool generated a comprehensive report showing exactly what happened month by month. The documentation it created for the IRS penalty abatement request was incredibly detailed - it referenced specific IRS revenue procedures for reasonable cause abatement due to third-party errors. Just heard back yesterday and my penalties were reduced by about 70%! Still have to pay the taxes obviously, but I'm saving nearly $900 in penalties. Definitely worth checking out if you're in a similar situation.

If your priority is actually getting someone at the IRS on the phone to discuss your situation (which can be incredibly frustrating), I'd recommend https://claimyr.com. I spent DAYS trying to get through the IRS phone system with no luck - constant disconnects after waiting for hours. I was skeptical but desperate when I found Claimyr. They basically hold your place in the IRS phone queue and call you when an agent is about to pick up. You can see how it works here: https://youtu.be/_kiP6q8DX5c In your case, speaking directly with an IRS representative could help explain the withholding error and get specific guidance on penalty abatement options for your situation. They might be able to set up a payment plan on the spot too. Saved me literally hours of hold music and frustration.

I need to apologize and correct myself. After dismissing Claimyr as BS, I decided to try it myself since I've been trying to reach the IRS about a similar withholding issue for weeks. To my complete surprise, it actually worked exactly as described. I received a call back in about 45 minutes saying my connection with an IRS agent was about to happen. I spoke with an actual IRS representative who was able to set up my payment plan and note the withholding error in my file. The agent told me to submit a formal penalty abatement request with my employer's documentation, but said it had a good chance of approval given the circumstances. They also mentioned this type of withholding error has been more common with companies switching payroll systems recently. For anyone dealing with a similar issue - being able to actually speak with someone makes a huge difference versus trying to figure everything out through the website.

Not sure if anyone mentioned this, but you should also ask your employer if they can issue a corrected W-2. If they acknowledge it was their payroll system error, they might be willing to handle the employer portion of the taxes that should have been withheld. Had a similar issue at my last job and the company actually covered about 40% of what I owed since it was their mistake.

Something similar happened to me last year. Make sure when you file that you check if you qualify for the "Estimated Tax Penalty" waiver - Form 2210. There's a special waiver if your withholding was done correctly in the beginning of the year but then stopped. You'll still owe the taxes but might get the underpayment penalty waived.