Tax Law (Questions About Taxes)/Unfiled Returns/Offers in Compromise
I have several unfiled tax returns, I know that 2 of them there is probably no tax due or very little, and the other one I probably owe a fairly substantial amount of money, the taxable income is likely $40k or so. I lost my job several years back and I received a settlement from a lawsuit, and with few employment prospects I used the money to live on. I filed an extension at the time and paid a partial payment and did not complete the return. During all of this time I had a number of medical conditions, which included 5 surgeries, depression, PTSD etc. At this point I have not worked in a few years, and I am not sure if I will be able to work again,as there has been no substantial improvement in my medical conditions for awhile. I survive on veterans benefits I am 100% service disabled,this rating was awarded to me after my tax issues. I have 0 equity. I do not own real estate, I live with a family member and pay rent, to help with the expenses, I am upside down on my vehicle ( As I had to trade in my previous car with a bad transmission). I have little cash in bank accounts, it fluctuates between $500 and $1000 at a time at most. The money that I receive in benefits is enough to survive with little left over to save. I want to resolve this issue with the IRS, but quite frankly I am terrified, and don't have much money to hire a professional. I have read about the offer in compromise, and was wondering how difficult it actually is to get approved, and if I file it myself is that diminishing my chances any? Thanks for your time
Based on your situation I would recommend that you take advantage of free or low cost services available to you from an IRS approved Low Income Taxpayer Clinic.
You can find the location of a clinic near you by going to the IRS website www.irs.gov and search low income taxpayer clinics.
Let me know if you get the help you need after you have met with a tax professional there.
William McConnaughy, CPA