My friend's being audited by the IRS! Advice needed!

[bigwillq]

His mom died 13 years ago and he got $250,000 from her life insurance. But he only claimed half of it on his taxes.
He has a job, for which he is paid under the table, and to the IRS' knowledge he has no job and has been living off of the life insurance money.


But now, 13 years later, he's getting audited. HE will probably have to pay the taxes plus fines and penalties, right?

What should my friend do?
All of his assest have been frozen.
What will/could happen to him?

[MrScorpio]

1. Costa Rica is nice this time of year

And cheap too

[MADem]

2. He's screwed. Tell him to get a lawyer, quick. n/t

[bigwillq]

5. He has been in touch with his lawyer!

:hi:

[AlCzervik]

3. He needs to get a tax attorney like right now.

[bigwillq]

6. The lawyer advised him to ACT Crazy!

Like he had a mental problem! :wtf: That way maybe they will go easy on him.

[AlCzervik]

16. he needs another lawyer then because that is not sound legal advice

[Roland99]

4. See if Walgreens has Vaseline on sale

[bigwillq]

8. OMG!

I had to laugh at this one!

[Roland99]

17. he he....

Honestly...he needs a good tax attorney. Who'd Willie Nelson use?

[bigwillq]

18. My friend will get a lot of use out of that vaseline

And he'll like it!:D

[joeybee12]

7. If it's gotten to the point where his assets have been frozen, then

he really needs a lawyer.

[bigwillq]

9. He has one!

See my post above. Lawyer told him to pretend he's crzy!:wtf:

[NV Whino]

10. Do not volunteer any information

Produce ONLY the records requested, not the entire year or 13 years.
Get a tax attorney. Not a CPA, an attorney--privileged information and all that.

[bigwillq]

13. I will pass that along to him!

Thanks.

[Nite Owl]

11. I thought that even 13 yrs ago

the first 600k or so was not taxed? He should contact a tax lawyer, not an accountant a lawyer to look at what the reason for the audit is.

[arwalden]

12. Your Friend Should Get A Lawyer...

... I'll bet that the legal fees will be cheaper in the long run. I'd imagine that lawyers realize that many folks live paycheck to paycheck and they ought to be willing to work out a payment schedule of some sort.

[bigwillq]

15. Thanks for the advice man!

:hi:

[brmdp3123]

14. He cheated, he got caught...

He'll have to pay, probably big.

[Dees]

19. I was an business owner for years.

At one point I co-owned or owned outright a manufacturing business, a wholesale business and two retail businesses. I was audited once by the state sales tax division and once by the IRS. Absolutely brutal and thorough. Niether one misssed a single piece of paper or transaction. On the IRS audit I came out squeaky clean. It took three months and was the biggest pain in the ass you can imagine. Not to mention the cost of employing my CPA. The state caught me not paying use tax on office products odered out of state and two magazine subscriptions. The auditors said they had never seen a business that clean before. Another three month ordeal. More CPA involvement. I don't believe bringing in my attorney would have helped. The IRS can walk right through an attorney. You are on your own. My accountant was the biggest help to me but ending up costing me about $5,000. I found the IRS to be very business like, thorough and without emotion one way or the other.