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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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  #1  
Old 01-18-2016, 02:40 PM
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mommyneedsadayoff mommyneedsadayoff is offline
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Default Tom Copeland-OT but Any Advice Is Appreciated

I totally understand that your tax advice is meant to be for us as providers, but I have a family situation and was wondering if you could advise me or direct me to someone who could? I understand if you cannot, but thought it could not hurt to ask

Here is the run down:

My mother and father owned their own businesses for 30+ years, paid taxes, ect.
My mother died in 2007 and my dad did not continue filing taxes after that point. (mom handled it all). (He filed in 2014, but has back taxes for 2008, 2010-1013)
Due to failure to file and failure to pay penalties(as well as interest), his tax liability in back taxes is $49k.
I submitted an OIC based on is earnings and assets (he is 65, two hips replaced, back issues, ect and his job is in heavy machinery, so he will not be able to work much longer), but they rejected it, saying he has 10 more years of income potential and basically saying he makes $1500 a month, so on that, he is capable of paying the debt in 34 months, which would be about $1400 month, leaving him no money to live on. His assets are tied to loans, so he has very little to sell to satisfy the debt, as well the fact that he should be operating at a loss (equipment cost, repairs, fuel, ect), but because he didn't file, the penalties are adding up to about 4 years worth of income. I am about to send in a letter and appeal the decision and was wondering if there is any advice you can offer. Is there a tax advocate I can work with, routes I can take to get rid of some the penalties, ect? I am sorry if this is not something you would like to answer to or if it is inappropriate for this forum. I have spent the last two years trying to work it out and we have one IRS attorney in our town, who charges $300 an hour and basically told me I was doing a great job, but still charged us over $500, saying I should just keep doing what I am doing. I am floundering, so any help, advice, you can give me is SO appreciated. Again, sorry if this is not okay to post on here and thank you for any help!
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Old 01-21-2016, 10:48 PM
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daycare daycare is offline
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Of course I'm not Tom but I have heard of IRS debt relief programs that claim they can help. I don't know how productive and legit those companies are but I hear those ads on the radio all the time.
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Old 01-22-2016, 08:27 AM
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e.j. e.j. is offline
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I wonder if Tom would be more likely to see your post if you moved it to the Daycare and Taxes area?

It's such a tough spot for your dad to be in. I hope you can figure out how best to help him. Good luck.
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Old 01-22-2016, 08:41 AM
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Quote:
Originally Posted by e.j. View Post
I wonder if Tom would be more likely to see your post if you moved it to the Daycare and Taxes area?
moving now....
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Old 01-22-2016, 09:27 AM
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mommyneedsadayoff mommyneedsadayoff is offline
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Thank you all so much and thank you for putting the post in a better spot BC! I am working on an appeal letter now, so wish me luck!
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Old 01-22-2016, 10:07 AM
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TomCopeland TomCopeland is offline
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Default Offer in compromise

Quote:
Originally Posted by mommyneedsadayoff View Post
I totally understand that your tax advice is meant to be for us as providers, but I have a family situation and was wondering if you could advise me or direct me to someone who could? I understand if you cannot, but thought it could not hurt to ask

Here is the run down:

My mother and father owned their own businesses for 30+ years, paid taxes, ect.
My mother died in 2007 and my dad did not continue filing taxes after that point. (mom handled it all). (He filed in 2014, but has back taxes for 2008, 2010-1013)
Due to failure to file and failure to pay penalties(as well as interest), his tax liability in back taxes is $49k.
I submitted an OIC based on is earnings and assets (he is 65, two hips replaced, back issues, ect and his job is in heavy machinery, so he will not be able to work much longer), but they rejected it, saying he has 10 more years of income potential and basically saying he makes $1500 a month, so on that, he is capable of paying the debt in 34 months, which would be about $1400 month, leaving him no money to live on. His assets are tied to loans, so he has very little to sell to satisfy the debt, as well the fact that he should be operating at a loss (equipment cost, repairs, fuel, ect), but because he didn't file, the penalties are adding up to about 4 years worth of income. I am about to send in a letter and appeal the decision and was wondering if there is any advice you can offer. Is there a tax advocate I can work with, routes I can take to get rid of some the penalties, ect? I am sorry if this is not something you would like to answer to or if it is inappropriate for this forum. I have spent the last two years trying to work it out and we have one IRS attorney in our town, who charges $300 an hour and basically told me I was doing a great job, but still charged us over $500, saying I should just keep doing what I am doing. I am floundering, so any help, advice, you can give me is SO appreciated. Again, sorry if this is not okay to post on here and thank you for any help!
Assuming the attorney you have worked with knows what he is doing, it sounds like you are doing what you can. I don't know why your OIC was not accepted. I assume you have made settlement offers. In my experience the IRS usually accepts reasonable settlement offers because they would rather get some money than no money. I don't have any direct experience with OIC so I can't be of much help. You may want to reach out to find another attorney in a larger town to get a second opinion. The attorney representing you doesn't need to live nearby.
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Old 01-22-2016, 11:43 AM
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mommyneedsadayoff mommyneedsadayoff is offline
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Quote:
Originally Posted by TomCopeland View Post
Assuming the attorney you have worked with knows what he is doing, it sounds like you are doing what you can. I don't know why your OIC was not accepted. I assume you have made settlement offers. In my experience the IRS usually accepts reasonable settlement offers because they would rather get some money than no money. I don't have any direct experience with OIC so I can't be of much help. You may want to reach out to find another attorney in a larger town to get a second opinion. The attorney representing you doesn't need to live nearby.
Thank you for your feedback! The IRS attorney here has been doing it for 50+ years, so I am sure he knows what he is doing, but he was very hard to work with. He basically wanted me to do all the work and still charged us for him checking it over and since my dad is on a limited income, it was hard to fork over $300 every time we went. I am writing a letter to appeal the decision and pan to back it up with medical documentation of his condition and his possible work potential, as well as documentation of his lack of valuable assets, so I am hoping they will reconsider. I was really shocked they didn't accept the offer, since my dad is almost 66 and collecting widower SS, as well as the fact that he only makes about $15-20k a year IF he gets work, which has also been hard to find. They even showed his monthly income minus expenses (with repairs/debt/living expenses) he is minus $700 a month by their own calculations, yet they think he can pay $1400 a month over the next 34 months? It just does not make sense to me and if they don't reconsider their offer, I am unsure of the next step. He tried selling his farm (house and 15 acres), but the housing market is down and the only offer he got was not approved because the appraisal was too low for a bank to give a mortgage on it, so I am not even sure they would get much if they put a lien on his assets, but if they do, it means he will have no place to live (of course, he would always be able to stay with us), so i am just unsure of their thought process.

Thank you again for your feedback and hopefully I can get them to reconsider!
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