Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
This couple is doomed for financial disaster. He needs to call the taxpayer advocacy office in Maryland and beg for assistance... they have the power to waive penalties and can assist in getting him square. He needs a good CPA at this point and will likely spend around $2,000 in professional fees.
I can't believe some of the responses on this thread. This guh is NOT a loser, nor does he have any character flaws. The IRS is a criminal junta and income tax is a total graft/scam. I do advise he settles with them as they have no regard for morality or law. That being saidx tax collectors should be in jail.
She'll be fine. There is something called the innocent spouse statute that was passed in the mid 80s.
Innocent Spouse would only apply to problems arising out of the couple filing joint tax returns where one spouse was unaware of the facts the other spouse used on the forms. So, the wife would not be held liable for tax and penalties if the husband lied about not getting a $20,000 bonus and didn't report that income on the tax return. If the wife knew about it, she can't claim innocent spouse.
Injured Spouse may be more appropriate but it only applies once the IRS seizes any tax refund (or does an asset seizure) to pay the back taxes & penalties. The injured spouse can ask the IRS to separate the two and hold only the guilty person responsible. The injured person will get their share of the refund (or their separate assets will be protected) and the guilty person will owe it all. But, the same rules apply about prior knowledge.
However, this really doesn't help the happily married couple because the person owing will still owe and their assets and monies can be seized. So the innocent/injured person will still be out the other persons share of daily operating funds. In addition, this can make it difficult for the couple to obtain financing. Most innocent or injured spouse submissions occur during a divorce (although the other party may claim the person knew about the misdeeds) or other no-longer-getting-along scenario.
I can't believe some of the responses on this thread. This guh is NOT a loser, nor does he have any character flaws. The IRS is a criminal junta and income tax is a total graft/scam. I do advise he settles with them as they have no regard for morality or law. That being saidx tax collectors should be in jail.
I can't believe some of the responses on this thread. This guh is NOT a loser, nor does he have any character flaws. The IRS is a criminal junta and income tax is a total graft/scam. I do advise he settles with them as they have no regard for morality or law. That being saidx tax collectors should be in jail.
The guy is absolutely a deadbeat and a loser, but I believe the point of this thread is, should she advice her friend to postpone the wedding. NO..! She should note even consider matting this guy, she is asking for a horrible life hooking up with someone like this..
If you condone his methods, that might be a good thing as he will need a cellmate.
It probably doesn't matter, she has read enough and hasn't returned, soooo....
My friend's brother never filed or paid taxes all his life. He claimed the maximum withholding so nothing was ever withheld from his check. When he turned 63, he wanted to get SS. He applied, explained it to them and somehow he got in on an amnesty. Turns out he had several refunds coming to him so he signed them over to the IRS, they called it even, and he started drawing SS.
This couple is doomed for financial disaster. He needs to call the taxpayer advocacy office in Maryland and beg for assistance... they have the power to waive penalties and can assist in getting him square. He needs a good CPA at this point and will likely spend around $2,000 in professional fees.
I think this is a bit of an overreaction. He should file and pay the taxes, one return at a time, oldest first, but not wait too long between the four filings. He will then receive deficiency (interest and penalty) notices and should pay them the day he receives them. This will probably end the problem, but if he is audited or receives a communication other than a deficiency notice (bill), he should *then* hire a tax professional.
I don't see why the taxpayer advocacy office would bargain with him if he has the money to pay the tax, interest, and penalty.
Caution: I am not a CPA, just a taxpaying citizen.
Self employed people have deductions. I'd bet he probably wouldn't owe a whole lot on a $50,000 annual gross after deducting all his expenses. However, the longer he wants, the harder it might be to get all the info.
He should find a C P A and get the mess resolved.
Depending on the line of work, he might not have many deductible expenses. Some work (ie, construction trades and automotive) often involve the purchase of expensive tools, supplies, and parts. Others (IT, graphic design, web design) involve some start-up cost, but minimal subsequent expenses. In addition, he has to have documentation for all deductions. I have a feeling that someone who hasn't filed in four years isn't keeping detailed ledgers of his expenses and receipts. He can try to claim the deductions, but the IRS is not going to be too lenient on someone who has intentionally evaded taxes for years and has the money to pay.
For the OP, should the $50K per year be more or less net income before taxes, here are some numbers for your friend.
First, $200K total (50K times four years) would owe ~$30,000 in OASDI/FICA taxes (Social Security, Medicare, etc.). The 7.65% that most individuals pay as well as the matching amount of an employer. The 2% reduction in FICA taxes for employees that occurred a few years ago would lower this amount a bit, but no more than ~$2,000.
For income taxes, $50,000 net becomes about $37,000 taxable after the standard deduction and exemption, and above the line deduction of the self-employment tax (he could itemize if that would save money). $37,000 taxable for four years is ~$22,000 before any penalties and interest.
I'm not sure how exactly the penalties and interest might accrue, so I don't want to even guess. I think it might have a lot to do with the mood of the IRS agent that deals with your fiance's case and how good of a lawyer/CPA he has. But, he's looking at a minimum of $50,000 in back taxes.
You know those late-night TV commercials advertising tax debt help? You may also suggest that he calls one of those. He's in deep, and waiting will only make it worse.
The guy is absolutely a deadbeat and a loser, but I believe the point of this thread is, should she advice her friend to postpone the wedding. NO..! She should note even consider matting this guy, she is asking for a horrible life hooking up with someone like this..
If you condone his methods, that might be a good thing as he will need a cellmate.
It probably doesn't matter, she has read enough and hasn't returned, soooo....
A deadbeat? For not turning his hard earned money over to thieves? I think not.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
