Need help filing back taxes for restaurant worker with multiple missed years

This is actually more common than you might think, especially in the restaurant industry. The good news is that your cousin may not owe as much as you fear, particularly if they're in a lower income bracket. First, they should gather whatever documentation they can for those years - W-2s, pay stubs, tip records, anything that shows income and withholding. If they can't find their W-2s, they can request wage transcripts from the IRS that show what employers reported. Since they had taxes withheld from paychecks, they might actually be due refunds for some years (there's a 3-year window to claim refunds). For years where they might owe, the IRS offers reasonable payment plans. The penalties and interest add up over time, but for relatively small amounts of unpaid tax, they won't be astronomical. The most important thing is to file now before the IRS comes to them. Voluntary disclosure always looks better than responding to IRS notices. Consider working with a tax professional who specializes in back taxes - many offer free consultations.

After reading your situation, I wanted to share something that really helped me when I was in a similar position. Last year I hadn't filed for 3 years while working at different restaurants, and I was absolutely terrified of what I might owe. I found this service called taxr.ai (https://taxr.ai) that specifically helps with back tax filing situations. They have tools that analyze your specific situation and help determine what you might owe before you even submit anything. It really helped me understand my potential liability and organize all my scattered W-2s and tip income. The stress relief alone was worth it - they helped me realize I was actually due refunds for 2 of the 3 years! For the year I did owe, it was much less than I feared because they found deductions I would have missed on my own.

Just wanted to follow up about my experience with taxr.ai since I decided to give it a try after seeing it mentioned here. I was super hesitant at first because I thought it would be complicated or they'd try to scare me into paying for extra services I didn't need. But wow, what a relief! They helped me sort through 5 years of restaurant work where I had a mix of reported and unreported tips. They actually showed me how to properly document everything in a way that was honest but didn't leave me overpaying. The best part was finding out I was due refunds for 3 of the 5 years because of education credits I never knew I qualified for! For the 2 years I did owe, it was about $1,200 total including penalties - WAY less than the $10K+ I was freaking out about in my head. Just wanted to share since it might help your cousin too.

I went through something similar with my brother who hadn't filed for 6 years. Our biggest frustration was trying to actually get through to someone at the IRS to discuss options BEFORE filing. We were put on hold for hours, disconnected repeatedly, and couldn't get straight answers. We finally used Claimyr (https://claimyr.com) to get through to an actual IRS agent. Their service basically holds your place in the phone queue and calls you when an agent is about to pick up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Once we actually spoke with someone, we got clear guidance on how to proceed with the back taxes. The agent explained which years to prioritize (most recent first) and confirmed that with my brother's income level, penalties would be relatively manageable. The peace of mind from speaking directly with the IRS was huge.

I have to publicly eat my words here. After being super skeptical about Claimyr in my previous comment, I decided to try it myself since I've been trying to reach the IRS about my own back taxes situation for weeks. It actually worked exactly as advertised. I got a callback when an agent was about to answer (took about 1.5 hours, but I was able to go about my day instead of sitting with a phone glued to my ear). The IRS agent I spoke with was surprisingly helpful and walked me through exactly what I needed to do for my unfiled 2020-2022 returns. I was able to set up a payment plan on the spot for what I owed, which was about $4,200 spread across the three years. Way more manageable than I thought. Sometimes it's good to be proven wrong!

One thing nobody has mentioned yet - if your cousin is low income, they might qualify for help from a Low Income Taxpayer Clinic (LITC). These clinics provide free or low-cost help to people who make below a certain threshold (generally 250% of the federal poverty line). I volunteered at one during tax season and we helped tons of restaurant workers file multiple years of back taxes. In many cases, people actually got refunds they didn't know they were entitled to! Google "LITC near me" or check the IRS website for locations. They can help with the whole process from filing the returns to setting up payment plans or even negotiating settlements if needed.

Just to add my experience - I worked delivery for 3 years and didn't file. When I finally did, I ended up getting refunds for all 3 years! Don't assume your cousin will owe a ton. Between the standard deduction (which was around $12,950 for single filers last year) and tax credits they might qualify for, they could be in better shape than you think. Even if they do owe, the IRS is pretty reasonable with payment plans. I know someone who owed about $7,000 and got a plan for like $120/month. Not ideal, but definitely not the financial death sentence people fear.