My brother has not paid IRS taxes for at least 20 years. He has been self-employed and received 1099's during this time. What is the best way to go about resolving this problem? He has no money, so I am concerned about contacting an expensive t...
I too will echo the earlier answers. It is important that the this problem is solved correctly or the consequences (criminal prosecution) could be severe. I'll add that a possible option for your brother would be to seek the advice of an attorney who is familiar with the IRS' informal "voluntary disclosure" policy. While there are certain requirements (i.e. no IRS action encouraged your brother to come forward), if your brother qualifies, he may be able to limit his filing requirements to the last 6 years and only have to pay tax, penalty and interest related to the 6 years filed instead of the full 20 years for which failed to file.
Frankly, if he has been receiving 1099's it is probably only a matter of time before the IRS catches up with him.
For your information, I'm attaching a link to the IRS website discussion of the voluntary disclosure policy.See question
My ex-husband agreed in our written and filed martial separation agreement to pay our 2003 and 2004 taxes which we filed jointly. He died two weeks after our divorce was final. I know now he was sick at the end of our relationship which was why he...
With respect to the question of the IRS coming after you for your ex husband's tax debt, unfortunately, the fact that he agreed to pay the tax in the marital settlement agreement will not be binding on the IRS. You may try responding to the IRS by providing them with a copy of the marital settlement agreement to see what they do. However, agreements between taxpayers have no effect on the application of the Internal Revenue Code.
You may consider filing an innocent spouse relief request with the IRS. In the request, you could ask for equitable relief from the liability by arguing that your ex agreed to pay the tax as part of the settlement, that he died shortly thereafter and then the estate (to the extent there was any value in the estate) was improperly divested of value. This may get you relief from the debt based on "equitable principles" and may encourage the IRS to pursue the beneficiaries of the estate for the recovery of the tax (instead of you).
If innocent spouse equitable relief is not your answer another option exists. You may have heard of the Offer in Compromise program. This program allows the IRS to cut a deal (i.e. settle for less than the full amount of the debt). There are three ways to ask for a compromise: financial hardship, doubt as to your liability for the debt and "other equitable reasons." Each requires the completion and submission of IRS forms.
As you said you are unable to pay, perhaps the financial hardship is appropriate. If so, you need to prepare a detailed financial statements from which the IRS will determine if a deal/compromise is appropriate.
As for your question on filing probate, that will likely be a question of state law where your ex lived. It is unrelated to how the IRS will handle your case but might be a way for you to recover something. You may want to contact a probate attorney in your state to learn a little more about the process. If the potential cost of an attorney is a concern, consider contacting the State Bar to find out what type of programs may exist for getting information or other legal assistance.See question
Can I file a joint tax return while divorce is still pending?
Yes. Your marital status is determined as of the close of December 31 of any given year. If you are married at that time, you and your spouse (even if estranged) can file a joint tax return. While you could file "married filing separately" you cannot file as "single" if still legally married. If however, your divorce is final on December 30, you are considered single for that entire tax year and cannot file a joint tax return for the year.See question