2004 taxes

What is the name of your state? ky

In 2004 I made a mistake on my taxes. I didn't file income for stock I sold to pay my legal debts. Believe me since then, I don't do my own taxes.

They say I owe a hefty amount that there is no way I can pay.

First of all I need to find out how to fix the problem. I can't afford a tax attorney. Where can I go for help?

You don’t need a tax attorney, take it to a CPA to look over your taxes or if you want to do it yourself, do an amended return (form 1040X). That is what the CPA is going to do anyway, but they might find some other credit(s) too. What the 1040X is a return that show the different between the old return (that you already file) and the new return (the one with the stock).

By "fix the problem", do you mean find a way to extend the time to pay or to reduce the amount owed? If so, you are probably going to have to come up with the money to hire a profession who will do an offer in compromise or an installment plan. Depending on the particular facts, you may also want to see a bankruptcy attorney as well.

I'm assuming that the return has already been audited ("they say"), right?

All the IRS knows is that you made the sale. The IRS does not know what your actual gain is, or if you even had a gain rather than a loss.

However, if too much time has passed since you were first contacted by the IRS, it may be more complicated but it still shouldn't be too late to resolve the issue of properly reporting gains or losses. Go see a tax professional. It does not need to be a CPA, it just needs to be someone who is accustomed to assisting with resolving problems with the IRS.