A lot of this information is coming second hand from my sister, so I apologize if I don't have all of the details.
My parents both work in education and have been very bad with finances my entire life. They declared bankruptcy after taking a mortgage for a house they couldn't afford and for other tax and debt related issues. Both of them quit their jobs to focus on multi level marketing schemes shortly before this happened and are still involved with various multi level marketing schemes to this day. My dad collected his retirement early after quiting his tenured teaching position to start his own small business that eventually failed. My car and my parents cars were impounded because of unpaid debt (the title of my car is still my dad's name). My sister bailed them out by paying close to $5,000 to help settle their debt and to recover their vehicles.
They have since both gone back into education have steady incomes, but continue to live in a large house that they rent at ~$2,000/month even though it's only my parents in the household. My sister and I have tried to convince them to downsize or move into an apartment to reduce this expense but they either can't or won't.
A few months ago I was doing laundry at my parents house while they were both at work (my washer was broken and was being repaired) and a man incessantly knocked on their door. I didn't answer since I assumed it was a salesman and it wasn't my home. When I left I saw an IRS notice taped to their door. I didn't approach the subject with them but mentioned it to my sister to see if she knew anything and she did not.
Fast forward to today. My sister called to update me on the IRS situation. My parents did not pay their taxes for close to 10 years. On the day of my wedding two weeks ago their accounts had been frozen. They have agreed to a payment plan with the IRS for a sum of $16,000 and have 6 months in order to repay or their accounts will be frozen again and I'm assuming their assets (cars) will be seized. My sister and I know that my parents won't be able to pay the IRS that amount in only 6 months. Not only because of their salary, but because of their expenses as well. We both feel trapped and are worried about our parents future and their ability to support themselves through retirement. My sister doesn't want to help them out because she doesn't want to enable their irresponsible behavior and become a safety net for them, and I am on the same page with her. I still want to help them, but I want them to be able to help themselves.
We've decided to have them sit down with my brother-in-law as a neutral party to help them come up with a budget and financial plan for their future and figure out if there's a way to for them to make the payments to the IRS on their own. My sister and I will sit down with them separately to be open and upfront about our unwillingness to help them after how irresponsible they've been.
Beyond that I have no idea what else to do. Again, they have no idea that I know and generally keep their financial problems private from me. I've worked very hard over the last few years to work out the bad financial habits that they instilled in me and I'm able to be in a steady place financially thanks to learning many habits here and through my wife, but I'm not equipped or prepared to handle this.
What are my parents options? Should they consolidate through a tax consolidation company, or could that make them worse off? Should I offer to loan them money?
Sorry for my rambling. Any help/advice would be greatly appreciated.
TL;DR: Found out my parents owe the IRS $16,000 in unpaid taxes over the last ten years and I don't know what to do or if I should help them with their debt
Submitted April 16, 2019 at 08:22PM by BR0STRADAMUS http://bit.ly/2Gqj2fw
