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Tax Law (Questions About Taxes)/Unfiled Returns/Offers in Compromise


Hello  William,

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 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  

Tax Law (Questions About Taxes)

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Former IRS Revenue Agent. Former Enrolled Agent. Self-employed Certified Public Accountant since 1990.

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Bachelor's Degree Accounting Major San Francisco State University Master's Degree Taxation Golden Gate University

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