To start off, I've been working as a freelance artist and animator in Atlanta for the last five years (Moved here back in 2020) And yeah, I've made a pretty dumb decision…
For the entire time that I lived here, I never filed my taxes… tbh almost all of my payments were via commissions, and my customers often pay me directly via venmo or cashapp, and there were even some clients who paid me via cash directly.
At first, i wasn't really making much, I just thought about this as a sideline, and since nobody ever really sent me a 1099, so here I was thinking it's all fine…
However, my name started buzzing online more and more, and people started commissioning me for higher prices. (one time someone paid me over $2500 via venmo), and these type of payments kept coming in every other day
I should have started filing my taxes after that, but i was far too stubborn and thought nothing of it… until finally, I received a letter from the IRS about "unreported income" specifically mentioning third party payment outlets. This was obviously Venmo or Paypal, since that was the only way I was receiving money…
I'm lowkey panicking right now… I'm about to start a job at a big studio sometime next month and I'm really scared this might f it all up…
I researched some services near me that might be able to help me with my problem, specifically Ace Bookkeeping over at Woodlake Office Park, ATC, as well as FusionCPA Please let me know how I can fix this before its too late
Been freelancing in Atlanta for 5 years without paying taxes… now I think the IRS is onto me
byu/BaseballIcy3133 inpersonalfinance
Posted by BaseballIcy3133
23 Comments
>Please let me know how I can fix this before its too late
The letter you received from the IRS explained exactly what you need to do to fix this.
Do that.
If the letter is too confusing, call the IRS. They will help you through the process.
Go talk to the CPA. Expect to pay a shitload of money in taxes and penalties, but if you face up to it and pay it you’ll be okay.
Your tax problems won’t get in the way of you getting a job. But you definitely owe money and might be audited.
Best to contact the IRS and be apologetic. Play dumb if you like and say you didn’t know you had to report income that you didn’t get a 1099 for or whatever. Tell them you definitely want to sort this out and get caught up.
Go back through ALL your records and add up the payments you made each year. Even the ones in cash. Do it right. Work with the IRS to file your taxes and then get on a payment plan to get caught up.
I’d start saving every penny you can until this gets sorted because you’re self employed which means you might be paying something like 30-40% of your income to taxes.
Honestly, getting a CPA involved early is the best move. I was in a similar position as well. I took way too long, which only made the situation worse. Ended up consulting with FusionCPA to clean things up, and it saved me a ton of time and headaches. Of course, check if it fits your budget before inking a an arrangement.
Do something quick,they will freeze any account you have until you contact them.
You need to call a CPA or EA that can represent you before the IRS.
PayPal and Venmo have probably been reporting your transactions; if you get audited (which seems very likely), you’re in for one hell of a time. The IRS often waits until you’ve accumulated significant backpay before they come after you.
Trust me, you would be better off solving this proactively.
Best case scenario, your CPA will negotiate with the IRS to get you put on a payment plan, which will include taxes and also a lot of accrued interest and penalties, not to mention the cost of the CPA you hire.
Barring that, the IRS will garnish your bank accounts and paychecks, and put liens on assets.
“I’m crazy enough to take on Batman. But the IRS?! No, thank you.” – The Joker
Venmo and cash app require a bank account (that has your SSN) and/or your SSN to sign up. They already know what you owe them. Get a CPA and hopefully they can help waive the fees and interest as part of the $$$$ youre about to pay
Read the letter, Follow the instructions DO NOT IGNORE THIS. You will have to file for the years you made over a certain amount. The IRS will work with you. They are not as scary as you think as long as you are on their good side.
Back taxes will only affect jobs that are specifically about money or the government. Unless the “big studio” is the CIA, you’re fine. It’s going to suck for a while because you’ll have to pay back every penny you owe, but they DO make payment plans and they’re generally pretty lax with how long it’ll take to pay back.
Metro ATL tax pro here….
Do not engage one of those tax relief firms you hear advertised on TV/Radio. They overpromise and underdeliver while trying to bill you in perpetuity.
First, file any returns that are missing. The IRS will not work with you unless you are compliant (last 6 years of returns filed). You can’t set up payment plans or do other things about the balance until you are compliant.
File the returns even if you owe and can’t pay. The penalty for owing and not filing is 10× higher than the penalty for owing and not paying.
Next, fix the problem that led to you owing. Increase your withholding or schedule and make estimated tax payments. It does no good to set this up on a payment arrangement, only to have it terminated a year later because you owe again.
If all returns are filed and you believe the balances are accurate, then it’s just a matter of paying the bill. You can set up the balance for all years combined onto a single payment plan.
Your best bet may be to sit down with a credentialed tax professional (CPA, Enrolled Agent, or attorney) who can represent you in front of the IRS. You can find help in various ways:
* The [IRS Directory of Credentialed Preparers](https://irs.treasury.gov/rpo/rpo.jsf)
* The [National Association of Enrolled Agents](https://taxexperts.naea.org/expertdirectory)
* Your state board of accountancy
* Your state Bar Association
* A [Low Income Tax Clinic](https://www.taxpayeradvocate.irs.gov/about-us/low-income-taxpayer-clinics-litc/)
* A website like [TaxCure](https://taxcure.com/) that matches taxpayers with tax issues and tax professionals who work in that space.
You have several options to address the debt:
* Penalty Abatement
* Short term Installment Agreement
* Long Term Installment Agreement
* Partial Pay Installment Agreement
* Currently Not Collectible
* Offer In Compromise
You may qualify for more than one or for none.
You can do any of them yourself, though I would suggest a local CPA or Enrolled Agent for the Offer In Compromise.
You need to file tax returns for any year you missed. You will have to pay back taxes and penalties, but those can be put on a payment plan.
Get thee to a CPA. Try to find one with a good bedside manner (ask around). You’ve got a mess to clean up, but just own it and make it right. Eventually you’ll free yourself of the worry of something probably worse than what’s awaiting you.
Death and taxes … it’s true what they say about’em both.
Go collect any tax documents generated from paypal/venmo/etc. Go to [irs.gov](http://irs.gov) and get transcripts for each year. Start a spreadsheet tracking your actual income and expenses for each year. Go to [olt.com](http://olt.com) and prepare a return (1040+schC) for each year. Print them out. If you’re happy with what you owe, mail them and pay online, and you’ll get a letter with penalties/interest. Penalties can be waived, interest cannot.
If you’re not happy, bring those returns/documents to a CPA or tax lawyer for a consult
Since you never filed a return, the statute of limitations has not started for any of these years, and the IRS can/will levy+collect as far back as they want.
**You are the reason the Feds made Paypal & Venmo send out 1099s.**
Get a tax attorney AND a CPA, and file 5 years worth of Federal and State tax returns. Negotiate as small of a penalty as you can, or just flat-out pay them in lieu of prison.
>nobody ever really sent me a 1099
Just curious … what’s the difference between these two statements:
*nobody ever **really** sent me a 1099*
And
*nobody ever sent me a 1099*
There’s many places with commercials that start ‘Did you get a letter from the IRS?’ so this happens often.
The solution isn’t complicated but it might be tedious. What you will have to do is file for all those years. Add up all your income and expenses. You will pay interest and penalty.
You can do it yourself but I can understand if you want a professional to do it.
You know, we’ve been paying for your roads and police and schools and fire department and you’ve not done your part. It is hard enough dealing with the billionaires not paying their taxes.
Figure it out and pay your damn taxes.
I assume you’re making over $250,000 a year? Because I’ve never heard of anyone making $40,000 a year receive a message from the IRS. The two people that I know were caught by the IRS earn over 300K a year.
Call them up, see what you owe them (or what you need to do) and do that.
If you have to file, make sure you claim all the expenses you incurred making that money. Like all of them
If you end up owing after that, make a payment arrangement with them for the lowest amount they’ll take monthly. Then, hopefully you’ll get a return on your new job at the studio next year that will wipe out the rest of what they owe you
A tax issue shouldn’t affect your new job either
You’re the reason 1099k forms exist and that the thresholds are being lowered. You need to find an accountant who can help you reconstruct and file taxes for previous years. Or you can trust the IRS to tell you what you owe and pay that.
You probably need a CPA to help you sort it out. Start going through all your transactions on cashapp, Venmo and PayPal. Try to memorize as much as possible.
Ask IRS for a transcript and they will show you what income is reported so that you can properly file your taxes.
You also need to go back and figure your business expenses because that will get you a nice deduction related to that income as that will greatly reduce your taxes & penalty owed.
Does IRS notice list a specific tax year? Start there!
That means you haven’t been paying into Social Security. If you don’t get those 30 work credits (or however they calculate it) you will not have any Social Security income in retirement.