Oh crap, I didn't even think about state taxes. I lived in Illinois for two of those years and New York for part of another before moving abroad. Are the processes similar for catching up on state taxes? Do I need to file state returns before federal?

The processes are similar but each state has its own forms and procedures. Illinois and New York both have relatively straightforward processes for filing past-due returns, but they'll have different forms than what you're filing federally. Both states maintain prior year forms on their tax department websites. You don't necessarily need to file state before federal - you can work on them simultaneously. However, since most state returns start with your federal AGI or taxable income, it often makes practical sense to complete your federal return first. Just be aware that both states may have their own penalties and interest for late filing, separate from the IRS penalties. New York in particular can be quite aggressive with penalties, so don't delay getting those filed once you start the process.

This! The FBAR penalties are no joke. My cousin got hit with a $10,000 penalty for a non-willful violation. If they determine it was willful, penalties can go up to $100,000 or 50% of the account balance. Definitely something to take seriously!

Should they still file identity theft paperwork if it was just the check that was stolen and not someone filing a fake return? Is that still considered tax identity theft or just regular check fraud?

Yes, they should absolutely still file the identity theft form. The IRS defines tax-related identity theft as anytime someone uses your personal information for tax purposes without permission. When someone manages to intercept and deposit a tax refund check, they've typically obtained enough personal information to compromise your tax identity. They likely know your name, address, SSN, and filing status. This level of information means they could potentially file a fraudulent return next year before you file your legitimate return.

I had this exact situation! In my case, someone had accessed my online tax account and changed my direct deposit information before my refund processed. The IRS initially told me it was my error too, but after filing Form 3911 and being persistent, they admitted their system showed the banking info had been changed after I filed. Make sure you specifically ask if your banking details were altered after your return was accepted. Sometimes the frontline representatives don't check the account change logs unless you specifically ask.

Did you claim any tax credits like the Earned Income Credit or Child Tax Credit? I've heard those always take longer to process.

I didn't claim any of those credits this year. Just standard W-2 employment income and the standard deduction. I claimed the child tax credit last year and that return definitely took longer - almost the full 21 days. So there does seem to be a clear pattern with certain credits triggering longer processing times.

Check if you claimed the Earned Income Tax Credit or Additional Child Tax Credit. By law, the IRS cannot issue refunds for returns claiming these credits before mid-February, so that might explain the delay.

What's the link to that pre-qualifier tool? I can't find it on the IRS site and their search function is terrible.

Here's the link to the IRS pre-qualifier tool: https://irs.treasury.gov/oic_pre_qualifier/. It's definitely not easy to find on their site! The tool walks you through a series of questions about your financial situation to help determine if an Offer in Compromise might be right for you. It's not a guarantee, but it's a good starting point before you invest time in the full application.

Does that compliance requirement also apply to payment plans or just OICs?

Payment plans (installment agreements) also have compliance requirements, but they're typically not as strict as the 5-year requirement for an Offer in Compromise. With a payment plan, you generally need to file on time and pay on time while the agreement is in effect. If you default on a payment plan by missing payments or failing to file future returns, the IRS can terminate your agreement and may resume collection actions. They're sometimes willing to reinstate agreements if you quickly get back into compliance, but it's best not to test their patience.

How long did it take you to complete your return with the self-employment stuff? I'm trying to budget my time and wondering if I should just block off an entire weekend.

It took me about 4-5 hours total, but that was spread over two evenings. The self-employment section definitely takes the most time, especially the first year when you're learning what expenses qualify and gathering all your receipts and documentation. I'd recommend setting aside at least a half-day of uninterrupted time, and make sure you have all your documents organized before you start. Have a folder with all your receipts for business expenses, home office measurements, mortgage documents, etc. Being organized upfront saves tons of time during the actual filing process.

This is great advice! Do you just find a random CPA or are there ones that specialize in self-employment situations? I'm worried I'll end up with someone who just plugs numbers into software like I could do myself.