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19149How do I file taxes after getting money under the table?

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  • Wilson Montgomery
    Jan 25, 2013
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      I'm a returning member. I first joined this group back in August 2010 when I was having tax troubles with the IRS, which I got the help I needed to fix all of those problems from this group. WHEW!!! Today, I'm returning back for pre-help of the inevitable.

      I live in Los Angeles, California. I figure I’m just a few weeks away from the IRS asking for me to file my 2011 tax return.

      Long story short, in January 2007 I refinanced my house, since I needed money to make some major house repairs. I ended up getting a 100K loan while being self employed. I made some repairs and kept the rest of the money in the bank. My business went bust in March 2007 and I had no income (due to The Great Recession and not being able to find a job at all until late 2010), so I lived off of the remainder of that refinance money I had in the bank until June 2010, which I paid my mortgage and living expenses with that money until the money ran out in June 2010. I got behind in my mortgage and my house started into the pre-foreclosure process in October 2010. In March 2011, the foreclosure process started. Luckily by April, my family loaned me the money to bring my loan current and to stop the foreclosure process. Though I found part-time and temporary work since late 2010, yet I always made less than 5K a year, mainly due to The Great Recession and not being able to find almost “any work” here in Los Angeles. Currently I do not make enough to pay the mortgage, so my family is still loaning me the money until I get back on my feet, since they are financially stable and can afford to help me “for now”. Since I have been making less than 5K per year since 2007, I stopped filing my taxes. Yet the IRS finally came after me in 2010, looking for my 2007 through 2010 tax filings, since the bank had reported that I had paid over 10K in interest (each year) for my mortgage. Luckily, back then, I had enough money in my savings account from the loan, where I could state where I got the money from (to pay my mortgage) when I had to file my taxes 2007 - 2010 tax returns. For the past 10 months, the IRS have left me alone, yet for the entire 2011 year, I made less than 5K and had got money (under the table money) from my family to help me kept my house and to stay afloat. 

      So now my question is, how can I file my 2011 taxes, when the bank has already reported that I paid more than 10K in interest for the 2011 year WITHOUT my dragging my family into it? Since several members of my family have given me various amounts of money to keep my mortgage current, the IRS is going to want to know how did I manage to pay a $1,300 per month mortgage and deal with basic living expenses while only claiming that I made 5K for the 2011 year. Since I know it is just a question of time before the IRS will want my 2011 returns, I want to file them now, before they come after me.

      What can I do to remedy this situation?

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