|
Huge tax bill -- I think I'm screwed
03-30-2010, 06:43 PM
|
#1
|
Recycles dryer sheets
Join Date: Apr 2005
Posts: 58
|
Huge tax bill -- I think I'm screwed
2009 was a difficult year. I lost my job in April, 2009 -- still unemployed, but waiting for an offer from HR.
Anyway, I lost my job -- wife's cancer is now stage 4 and she is no longer a candidate for surgery or radiation therapy. In September, 09 decided to sell our primary residence. Had a signed contract and I purchased a villa down the street that was going through foreclosure. Borrowed the funds from my retirement account with the plan to repay after our home we were selling closed. Buyers with signed contract walked away from purchasing our home. Tried to find other seller, but that didn't happen. Ended up renting, instead of selling the home. Tried getting a mortgage, even a second mortgage, but due to my unemployment that didn't happen. I was willing to put 5 years P&I, taxes into escrow -- banks acted as if I had the H1N1.
You know the rest, I'm getting hit with a huge tax bill to the tune of $80,000. Due to my wife disability -- I don't have to pay the 10% penalty. The rental income is covering the previous home.
We are trying to sell our condo in Florida -- I know, bad time to be doing this, but the HOA fees have more than doubled since Charlie. We bought this condo 6 years ago as an investment -- and it hasn't. I don't see real estate in SW Florida having a significant recovery for 5-10 years. So, I'll cut my losses.
I've already recovered a large chunk of the $80K in the foreclosed property. Since I've been out of work most of the reserves are dwindling -- so I don't have the funds to write Uncle Sam a check for the entire amount.
Once I get a job, I plan to get a HELOC and pay the tax bill -- It's the penalties I'm worried about. What the truth about these companies that work with the government to pay a overdue tax bill for a significantly reduced amount.
Thanks!!!
Dan
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
03-30-2010, 07:05 PM
|
#2
|
Full time employment: Posting here.
Join Date: May 2008
Location: Lexington
Posts: 714
|
Stay far far away from "debt reconciliation companies." They are borderline illegal outfits, similar to payday loan centers. If you need tax advice, ask a CPA or a tax lawyer.
|
|
|
03-30-2010, 07:11 PM
|
#3
|
Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
|
I'm so sorry that your wife is so sick.
I thought I had heard on the radio a few weeks ago that the IRS was going to be more lenient on unemployed taxpayers this year and I found this article from the IRS.gov website: IRS Outlines Additional Steps to Assist Unemployed Taxpayers and Others
I don't know if there's anything in that article that will help you, but I hope so!
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
|
|
|
03-30-2010, 07:44 PM
|
#4
|
Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
|
I knew someone who got into a similar tax situation and they got a lawyer and ended settling for a lot less than the orginal amount .Good luck !
|
|
|
03-30-2010, 09:40 PM
|
#5
|
Thinks s/he gets paid by the post
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
|
Quote:
Originally Posted by Bestwifeever
I'm so sorry that your wife is so sick.
I thought I had heard on the radio a few weeks ago that the IRS was going to be more lenient on unemployed taxpayers this year and I found this article from the IRS.gov website: IRS Outlines Additional Steps to Assist Unemployed Taxpayers and Others
I don't know if there's anything in that article that will help you, but I hope so!
|
The offer in compromise is one solution, but you will have to cough up 20% of the offered amount when you make the offer, and only about 25% of offers are accepted. Here is a recent article that seems to offer advice for people in very similar situations: File your return, even if you can't pay your taxes - USATODAY.com
You're in a tight spot, but it's not hopeless by any stretch.
I strongly recommend that you don't go dealing with those folks down at the IRS all by yourself. Hire a tax attorney or Enrolled Agent - and not one of those gimmicky "pennies on the dollar" guys. You want someone to help you craft your approach to this situation who understands how the IRS works. It may be the kinder gentler IRS, but how much gentling can a shark undergo? It's like working out a plea bargain in a criminal trial, you need a sharp person to tell if you're getting the best deal you can expect or not before you go signing next to the "X".
Good luck.
__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
|
|
|
04-01-2010, 06:58 AM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
|
Yeah, being forced to sell into a weak market is not good.
How about a PT (i.e. under employment) job just until you get approved for the HELOC. Shouldn't take too much income to get approved (provided the rentals are positive cash flow).
I wouldn't be filing my own taxes ... not this year! $300 on a CPA would be well spent.
__________________
FIRE'd since 2005
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|