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So "John" owes over $51K to the IRS but simply doesn't have the money or assets to pay. $51k may seem like a lot but it isn't when considering many years, pena

So "John" owes over $51K to the IRS but simply doesn't have the money or assets to pay. $51k may seem like a lot but it isn't when considering many years, penalties, fees and interest. So, is he condemned for life to never travel outside USA to visit ailing mother and so on? Or just apply for humanitarian exception passport and hope?

nradov 8y ago
The IRS will settle tax debts for less than the amount owed if you can prove you have few assets and a low income. They're just like any other rational debtor in that regard.
- perl4ever 8y ago
  The IRS doesn't even care about old tax debts in my experience. People perennially bring up the nightmare scenario (as suggested by the GP) where owing $1.99 turns in to a zillion dollars over the years. I was going through a background check a few years ago that required subjects to have paid all their debts to the government, and I found a temp job from a past tax year never sent me a W-2, so I filed an amended return to pay the $10 or whatever it was I owed. The IRS sent me back a check plus interest and a polite letter saying it was past the statute of limitations so they could not accept it. This sort of thing tends to confirm my prejudices about those who complain all the time about the IRS as a bogeyman.
  - duxup 8y ago
    Provided you communicate with the IRS in good faith and can show them you're doing that, I've found the IRS to be pretty easy to deal with. It is when you don't respond, straight up don't pay for years, or lie, or something that it gets ugly. Granted everyone's mileage may vary.
adventured 8y ago
No, not condemnded to life. IRS back taxes have a ten year statute of limitations (from the point of assessment). Formally they call it the collection statute expiration date (CSED). They can't collect after that. If you owe the IRS Wesley Snipes / Willie Nelson type money, they will typically sue you in court however (which can effectively extend the ten years by generating a suspension of the countdown).
- perl4ever 8y ago
  For practical purposes, less than 10 years. Googling[1] suggests that the IRS has 3 years to audit you and ask for more money in general, and 6 years if the amount of income omitted is >25% the income you reported. This seems eminently reasonable to me. Just don't lie to them and you don't have to live in fear of making a small mistake. [1]https://www.thebalance.com/irs-statute-of-limitations-3192947 https://www.thebalance.com/irs-statute-of-limitations-319294...
  - masonic 8y ago
    3 years to audit you 3 years after you file. The clock doesn't start until you file a return.

nradov 8y ago

The IRS will settle tax debts for less than the amount owed if you can prove you have few assets and a low income. They're just like any other rational debtor in that regard.

perl4ever 8y ago
The IRS doesn't even care about old tax debts in my experience. People perennially bring up the nightmare scenario (as suggested by the GP) where owing $1.99 turns in to a zillion dollars over the years. I was going through a background check a few years ago that required subjects to have paid all their debts to the government, and I found a temp job from a past tax year never sent me a W-2, so I filed an amended return to pay the $10 or whatever it was I owed. The IRS sent me back a check plus interest and a polite letter saying it was past the statute of limitations so they could not accept it. This sort of thing tends to confirm my prejudices about those who complain all the time about the IRS as a bogeyman.
- duxup 8y ago
  Provided you communicate with the IRS in good faith and can show them you're doing that, I've found the IRS to be pretty easy to deal with. It is when you don't respond, straight up don't pay for years, or lie, or something that it gets ugly. Granted everyone's mileage may vary.

adventured 8y ago

No, not condemnded to life. IRS back taxes have a ten year statute of limitations (from the point of assessment). Formally they call it the collection statute expiration date (CSED). They can't collect after that. If you owe the IRS Wesley Snipes / Willie Nelson type money, they will typically sue you in court however (which can effectively extend the ten years by generating a suspension of the countdown).

perl4ever 8y ago
For practical purposes, less than 10 years. Googling[1] suggests that the IRS has 3 years to audit you and ask for more money in general, and 6 years if the amount of income omitted is >25% the income you reported. This seems eminently reasonable to me. Just don't lie to them and you don't have to live in fear of making a small mistake. [1]https://www.thebalance.com/irs-statute-of-limitations-3192947 https://www.thebalance.com/irs-statute-of-limitations-319294...
- masonic 8y ago
  3 years to audit you 3 years after you file. The clock doesn't start until you file a return.