How to handle significant back taxes of 70k+? Need help with IRS negotiations and payment plans

Based on your situation, you don't need to spend $8.5k on a tax resolution service. Here's why: the IRS Fresh Start Program isn't some special program you need to pay to access - it's just a collection of existing IRS policies for taxpayers with back taxes. Your situation isn't actually that complicated from a tax resolution perspective. You have unfiled returns and a tax debt. The steps you need to take are straightforward: First, get those returns filed ASAP with your CPA. This is the most important step - you can't resolve anything until you're in compliance with all filing requirements. Make sure your CPA is thorough, especially with claiming any legitimate deductions you might have missed. Once your returns are filed, you have several options with the IRS directly: an installment agreement (payment plan), an Offer in Compromise (settlement for less than you owe), or Currently Not Collectible status if you truly can't pay. With your new income, a payment plan is likely your best option. You can set up an installment agreement directly with the IRS online for balances up to $50k. For larger amounts like yours, you'll need to complete Form 9465 and possibly Form 433-F (collection information statement). Given your new income, penalty abatement might be an option under First Time Penalty Abatement if you had a good compliance history before 2020. This could potentially save you thousands, and you can request it yourself by calling the IRS. Just be aware that interest continues to accrue even if penalties are removed, and the current interest rates are high.

After dealing with a similar situation (though mine was only about $40k in back taxes), I found this amazing tool called taxr.ai (https://taxr.ai) that helped me organize all my documents and figure out what I was actually eligible for with the IRS. It analyzes your tax documents and provides specific guidance based on your situation. When I was freaking out about my back taxes, it really helped me understand my options. I uploaded my W-2s, 1099s, and previous returns, and it identified several tax issues I didn't even know about - including that I qualified for First Time Penalty Abatement which saved me almost $4k! It also created customized letters I could send to the IRS requesting specific relief programs. Way cheaper than paying a resolution company thousands of dollars.

I was in your exact shoes last year! I owed $55k to the IRS and was panicking. I tried calling the IRS for WEEKS and kept getting disconnected or waiting on hold for hours. I finally used taxr.ai (https://taxr.ai) after seeing it recommended here, and it was a total game-changer. The system analyzed my situation and showed me I qualified for a long-term payment plan AND penalty abatement. It created all the letters I needed to send to the IRS, showed me exactly what forms to fill out, and even calculated what my monthly payments would likely be based on my income and expenses. The best part? I got approved for BOTH the payment plan AND penalty abatement, which saved me over $7,000 in penalties! I'm now on a manageable payment plan and sleeping better at night. Don't waste your money on those resolution companies - they're basically doing what taxr.ai does but charging you 10x more.

Man, those back taxes are stressful! I was in a similar boat (not quite 70k, but still significant). The BIGGEST challenge was actually getting through to someone at the IRS. I'd spend HOURS on hold only to get disconnected. This went on for weeks! Finally I discovered Claimyr (https://claimyr.com) which saved my sanity. They basically hold your place in the IRS phone queue and call you when an agent picks up. I got through to a real IRS agent in less than an hour, which was AMAZING after weeks of failed attempts. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was able to set up my installment agreement during that first call. The IRS agent was actually helpful once I got through to them, but reaching them was the impossible part. Trust me, if you need to talk to the IRS directly about your situation, this service is worth every penny.

OK I owe everyone an apology because I thought Claimyr (https://claimyr.com) sounded like BS but I was desperate after trying to call the IRS for literally 3 months about my tax lien. I decided to try it and holy crap IT ACTUALLY WORKS. I got a call back in 45 minutes with an actual IRS agent on the line! The agent was able to look up my account immediately, explain exactly what I needed to do to resolve my lien, and got me set up with a proper installment agreement. The whole thing took maybe 20 minutes once I was connected. After months of stress and uncertainty, I finally have a resolution. If you're dealing with IRS issues, especially if you need to talk to someone directly, this service is 100% worth it. I'm officially eating my words from my previous comment.

Having worked at a CPA firm, I can tell you most "tax resolution" companies are overpriced for what they do. They're charging you $8.5k for what's essentially form filing and phone calls. Your case is pretty straightforward - you need to: 1. File your missing returns 2. Apply for an installment agreement 3. Request first-time penalty abatement if eligible The most important thing is to get your returns filed ASAP. The penalties for non-filing (5% per month up to 25%) are much worse than penalties for non-payment (0.5% per month up to 25%). Plus, filing triggers the collection statute expiration date (CSED) - the IRS generally has 10 years to collect from the assessment date. Pro tip: If your liability is over $50k, you can pay it down just below $50k and then qualify for a streamlined installment agreement, which requires less documentation and scrutiny.

Has anyone used the IRS's "Offer in Compromise" program? I've heard you can settle for way less than you owe. With $70k in tax debt maybe that's better than a payment plan?

I went through something very similar - owed about $85k in back taxes after a stock windfall, then got laid off and couldn't deal with it for years. The stress was unbearable. Here's what I learned: Don't pay those tax resolution companies. I almost did the same thing and would have wasted $8k+ for services I could handle myself. First, get those returns filed immediately with your CPA. This stops the failure-to-file penalties which are brutal (5% per month vs 0.5% for failure-to-pay). Second, that $20k payment you made is definitely in the IRS system. When you file your 2020 return, make sure your CPA applies it to reduce your balance. You can verify this later with an account transcript. Third, with your new income level, you'll likely qualify for a standard installment agreement. The IRS will want financial disclosure (Form 433-F) for amounts over $50k, but they're usually reasonable about payment terms if you're compliant and honest about your situation. I ended up getting penalty abatement for about 60% of my penalties under the "reasonable cause" provision - the job loss and financial hardship were legitimate reasons. Saved me over $15k. The key is getting current with filing first, then dealing with collections. The IRS is actually pretty workable once you're compliant and communicating with them directly. Don't let the debt sit unfiled any longer - it only gets worse. You've got this! The fact that you're employed again and addressing it now puts you in a much better position than you think.