taxes owed

[valk]

What is the name of your state?What is the name of your state? Right now it is Illinois but it involves Georigia, and south Carolina taxes. Maybe Virginia too.

I would just like to know what our chances are with a tax lawyer:

My husband took out an SBA loan in 1999 to open up a business (Georgia)
His father left him a good sum of money when he died of which he owed inheritence taxes on (SC) (in 2001 it was $10,000.00 taxes owed i am sure with intest it is much higher now)
but he used that to buy his house and also he put it into the business.
He also seperated from his ex wife in 99 and up to 2001 he paid her in alimony at least $50,000.00 on his own.
The business went bankrupt in 2000 ( he didn't file but he used up every penny on employee payroll out of his savings and his 401k from his old work.
He sold his house (his ex wife lived in)to pay off the SBA loan, and turned over all of his stocks he owned to pay it off)
His business never made a profit in the (about) a year it was open till we closed the doors.
We had a house in 2000 together and we sold that also (he put $30,000.00 down on that house and we took a loss selling it cause we only owned it for almost a year) We got $20,000.00 back on that of which he gave his ex wife $4000.00. and we lived off the rest for about a year. He didn't work again till the end of 2002 but mostly odd jobs. Then he got good work in 2003 of which he is still working there. so he really only worked these past two years.

We are having the taxes done right now through an accountant
The amount that we are supposed to owe is about maybe $50,000.00? Probebly more...but since all money he had went into a business that never made a profit and he lost every penny he had. Will he be expected to pay taxes on that anyways?
What about the inheritance taxes owed from 1999? Can we have that reduced or anything done since it all went into a business that never made a profit and he lost it all?
and also he never filed since 1999, but any money he would get back for the last two years at this job would have gone to taxes owed from before.
and are there penalties that can be dropped from not filing since 1999?

The accountant seemed to think that the taxes from the business would cancel out since there was never a profit and he lost all money.
but what about penalties from not filing for 4 or 5 years, and the inheritence tax?
Could a tax lawyer help lessen any of that?
S.C. already has that on our credit report owed.
(in 2001 we made arrangements to make payments of $100.00 a month to pay that off, we couldn't even pay that, so we only made two payments and quit but i was told by S.C. that if we paid $100 a month for the year at the end of the year we would only owe $11,000.00.) so i figure at that rate of interest by now we probebly owe them in the sum of $40,000.00 now.

I know it is a little complicated but can you give me any idea of what can be done?
Thank you for your time!

[Snipes5]

It isn't a "little complicated", it's a LOT complicated. You have five or six different tax issues going on, involving three states and the federal government.

Since this is so involved, I would suggest a Tax Attorney, yes.

If not, a very experienced Enrolled Agent (search [url]www.naea.com[/url]).

The tax lawyer isn't the one you have to worry about your "chances" with... I am also not sure what you mean by "chances". It sounds as though your husband completely ignored all tax laws and many of his tax liabilities for a period of 5 or 6 years.

What you need is someone who can sit down with your husband and reconstruct his financial life, going back to his first marriage, carrying on through the rise and fall of his business, sale of a home, stock sales/losses, divorce, second marriage, etc.

There is no way anyone here can answer your questions, (there are simply too many and not enough info) however when you find someone to take care of this, see if you can negotiate a flat fee. Otherwise it's going to cost you an arm and a leg.

And yes, when it is finally sorted out, a good EA should be able to negotiate with the IRS for pennies on the dollar. You are a long way from that, however.

Snipes

[dallas702]

Holy crap!

Hopefully you can find a good financial management firm with CPA/attorney/enrolled agent AND someone to guide you from now on. Your interest owed will be one thing, but your penalties are gonna be really stiff.