I know two long-retired couples where the husbands recently made serious mistakes on taxes and the results are really ugly, to the point that what should be comfortable retirements for them are now seriously imperiled. And they are too old to recoup or start over.
In the first case, the husband is perhaps getting old, didn’t pay money he owed, then panicked when the IRS notices came and ignored them. Big mistake. They locked his bank accounts.
In the other case, the husband is clearly getting senile, didn’t file for a few years, then ignored IRS letters. It just caught up with them with dire possible consequences indeed. The IRS does accept senility as a mitigating factor but doing so now will involve time and money.
This isn’t really the fault of the IRS. The rules are clear enough.
Folks, if the IRS comes knocking, answer the door. Yes, you can compromise with them. But you have to talk to them. A friend and former IRS agent is an Enrolled Agent now and is expert at working out Offer and Compromise agreements, should you need one. Contact me for info (I receive no finder’s fee from him.)
These two cases are tragic. I don’t know what will happen and neither do they. How do we protect the elderly from making catastrophic errors like this?