Idk if this helps but I got a letter from Pioneer (another IRS collection agency) last year. Called the IRS directly and found out I qualified for Currently Not Collectible status because of financial hardship. The collection agency never mentioned this was an option even though I told them I couldn't pay. So definitely talk to the IRS directly about ALL your options, not just the ones the collection agency tells you about.

This is really helpful information everyone is sharing! I'm in a similar situation with a late filing penalty for my LLC. One thing I wanted to add - when you call the IRS directly about penalty abatement, make sure you have all your documentation ready. They'll want to know the specific reason for the late filing and any supporting evidence. For health-related issues with your accountant, if you have any documentation of that (like medical records or communication showing the accountant was unavailable), it could strengthen your reasonable cause argument. The IRS is generally pretty understanding about situations beyond your control, especially if you have a good compliance history. Also, when you do call, be prepared to explain why this was a one-time occurrence and what steps you've taken to prevent it from happening again. They like to see that you're being proactive about future compliance.

For what it's worth, you might want to double check with your HSA provider directly too. Last year my 1099-SA had box 3 blank, but when I called my provider, they said they could send a corrected one with the right box checked. Apparently they had the info but hadn't included it on the form. Might be worth a quick call to see if your provider just made a mistake.

One more important thing about HSAs that nobody mentioned - those receipts for your qualified medical expenses don't expire! If you paid $3,200 out of pocket but only reimbursed yourself $2,750 from your HSA, you can actually reimburse yourself that remaining $450 from your HSA anytime in the future - even years from now! It's one of the best features of HSAs.

It's worth checking if your mom qualifies for the IRS Fresh Start program, especially since this debt is so old. With a proper financial statement (Form 433-F like someone mentioned), she might qualify for an Offer in Compromise where she pays less than the full amount owed. At her age and income level, the IRS might accept pennies on the dollar, especially for old tax debt. My mother owed about $35k, and we settled for around $3k through this program.

I went through almost the exact same situation with my grandmother two years ago - she had about $22k in back taxes from 2016-2017 that my late grandfather had mishandled. The language barrier and technology issues sound very familiar. Definitely go with Form 2848. The 8821 would just frustrate you because you'd be able to see the problem but couldn't do anything to fix it. With the 2848, you can negotiate directly with the IRS on her behalf. A few practical tips from my experience: First, gather ALL her IRS notices before filling out any forms - you'll need the complete picture. Second, when you file the 2848, also prepare Form 433-F right away. The IRS will likely ask for it during your first call anyway, and having her financial info ready will speed things up. For someone with $1800/month income and $28k in old tax debt, the IRS is usually quite reasonable about payment plans. We got my grandmother's payment reduced from $480/month to $75/month, and after a year they put her account in "Currently Not Collectible" status because of her age and limited income. One thing to be prepared for - they may ask about any assets she has, including her home equity. But at her age and income level, they're typically much more flexible than with younger taxpayers.

Quick heads up - make sure you keep copies of EVERYTHING you send them. The IRS is known for losing mail these days with all the backlogs their dealing with. And when you do mail it, use certified mail with tracking so you have proof they received it.

Also worth noting - if you owe additional taxes after submitting the 8962, you'll get a separate bill for that amount plus interest from your original filing date. But if you end up getting a larger refund, they'll send you the difference. The whole process is annoying but at least they do eventually sort it out once they have all your forms.

Has anyone used TurboTax or similar software to handle this kind of international situation? I'm in almost the exact same boat (moved to Germany in 2023, have US rental property) and wondering if regular tax software can handle the complexity or if I need something specialized.

I'm dealing with a very similar situation - moved to Germany in late 2023 and have been struggling with understanding how the tax treaty applies to my US rental income. From what I've researched, the key is that rental income from US property remains primarily taxable in the US under Article 6 of the treaty, but Germany will still include it in your worldwide income calculation. One thing I learned that might help: make sure you're properly calculating your German tax residency date. If you moved in September 2023, you likely became a German tax resident immediately upon arrival with intention to stay permanently. This affects how much of your 2023 income Germany will want to tax. For the rental property, you'll need to report it on both returns but can claim foreign tax credits to avoid double taxation. The German tax advisor's quote does seem excessive - I've seen quotes ranging from €800-1500 for similar complexity. Have you considered getting a second opinion from another German Steuerberater? Also, don't forget about depreciation on your rental property - you can claim it in both countries, which can significantly reduce your taxable rental income.