I have a few years' returns that have not been filed. One of those has a small refund coming and the others have amounts owing. The net total federal tax owed is about $8k. I assume that approximate penalties and interest will be another $6k. Then there will also be several thousand in state taxes. So, I assume the grand total to be around $20k. Without refinancing my home, I can sell some things to scrape together maybe half of the overall total. Questions:
1. Am I better off paying more immediately to state or IRS?
2. Assuming state will allow 24-month plan, will IRS allow at least 3 or 4 years?
3. Will they just automatically audit me because of this? Once I file, pay some, and work out payment plans, am I any more or less likely to be audited on these years, prior years or future years?
4. Should I handle all of this on my own or use professional help? (As you can see, affordability is, unfortunately, a big issue.) Does using an attorney or an enrolled agent in any way disadvantage me in my relationship with IRS (such as increasing chance of audits, etc.)?