"I Haven't Filed Taxes In 10 years" (And He Make $250,000 A Year)

brought to you by the Every Dollar app. Start budgeting for free today. >> I haven't paid um my RS in several years. Um basically I got out of high school 0708. Um kind of fell into a good job uh working for foreclosure companies and started buying up foreclosures and kind of amassed about uh got about 267 doors uh rental. But um it's all paid for. But I'm at the point I just bought a house um through private financing, but I would like to secure permanent financing, but I haven't done uh my federal taxes in several years. >> And they're going to want to see tax returns for you to get that financing? >> Yes, sir. >> And this is the only reason you've decided I guess you should probably deal with that. >> Um >> why haven't you filed? I'm just uh kind of ignorant, I guess. >> No, you're not. Ignorant people don't own 27 rentals. >> Thank you. Thank you. >> You're very successful. >> So, what has caused you to just ignore the taxes completely? Cuz you filed taxes up until what year? >> I think the last time was 16. I did it. >> Okay. So, we're coming up on 10 years. And nobody's knocked down your door yet. You haven't gotten anything in the mail? >> No, sir. I haven't I don't really on paper I guess show making a bunch. Most of that income's in cash >> and you've spent it. Do you have the money to pay all these back taxes, penalties, fees? >> I don't have any idea what it would be. Um >> Well, how much have you made in the last 10 years? >> I mean, I'm anywhere from 10,000 a month to 15,000 a month just depending on I got a lot of irons in the fire. So, you're talking about making >> 150 to 200 grand every year for the last decade. >> Yeah. I mean, this uh slowly escalated year to year. >> All right. I'm going to call it half a million. Just ballpark numbers. How would you come up with half a million dollars to pay the IRS? >> Um, it's a good question. And I mean, I figured up the other day before I got came on here, I I got about conservatively $4 million in real estate. >> Mhm. >> So, it sounds like if I were in your shoes, here's what I would do personally. Number one, I would get with an enrolled agent or CPA yesterday and start tracking down exactly what I need to do to get current, get on a payment plan, and get this mess cleaned up. And then whatever that bill total is, if it's $500,000, I'm not even going to get on a payment plan, I'm going to liquidate enough properties that I knock this out. >> Mhm. >> Well, I mean, should I be even reporting the cash? >> You should report every dime you make. Give to Caesars. What is Caesars? So, I know you want to avoid that. >> I don't know if you're going to take my advice, but I don't want to I don't want the next phone call from Claude to be from a jail cell. >> Yeah, >> that'd be ugly. Yeah, >> you got to do this with integrity, my guy. >> The last people you want on your back is the IRS. They can destroy your life. >> I know that's right. >> And so I would not ignore this any longer. It's been almost a decade. >> Um, >> what are you going to do next? >> Um, I guess I need to go to a uh CPA. >> That's right. And you're going to need to get with the IRS and get and figure out exactly what you owe. And they can help with that. But do not avoid I know you deal with a lot of cash. I would get things on the books. I would have everything every eye dotted every tea crossed. >> Okay. >> And that might mean you need to hire someone to do the books. If you don't like doing it, you don't want to do it. I would hire someone who can do it. >> The good news is you have the assets to clean this up very quickly. >> Yeah. >> How much debt do you have otherwise? Um, I mean, I borrowed 165,000 on that house, uh, from that private investor, but I mean, I've got I've been offered 275 for it like it is, but I besides that, I I don't owe a dime. >> All the 26 properties are free and clear. >> Yeah. >> So, could you sell one or two of those to knock out this IRS debt worst case? I mean, I've been doing letting a few go, but the dag on property taxes and other unforeseen things are beating me up. >> It just doesn't make sense. Why are you so tight on cash? >> I mean, just >> if you're all paid for, they should be cash flowing beautifully. Are you just spending every single dime you get? No, not Well, I've um Okay, so I I bought all these houses kind of cheap um several years ago, over the last several years, and then I was just shoving people in them, doing the minimum, and so now I'm kind of paying the popper on that. Um so when they're coming open, I'm spending a fair amount of money >> on repairs and maintenance and all that because you neglected to do it. >> That's right, >> man. That's part of the business. I You know what? If this is too much for you to handle, I would liquidate a bunch of properties and just keep what you can actually manage and manage. Well, >> well, I mean, it's my sole it's my main income. >> Yeah, but if you liquidated the properties, you'd have something called money. And right now, it sounds like you're tight on cash flow for some reason because you're just bleeding out with 27 properties to manage. It's more expensive. >> Yeah. I mean, if if I got a few thousand bucks left over at the end of the month, I'm doing good. I mean, I'm not >> I'm just confused. For a guy who doesn't pay taxes and makes 15 grand a month, you shouldn't be this broke. >> Well, I'm I'm at about 10 right now. I mean, if I got everything full, I'm at 15. >> Out of 27 properties, you're only making 10 grand a month. They're all paid for. >> What kind of properties are these? >> I've got um Well, it's definitely uh low low income stuff. Like, okay. I mean, I bought some of these things in in 09's about when I started buying. I mean, I bought these things for $5,000. So, you're making like a few hundred bucks off each one. >> Um, a few hundred. I mean, I'm the bottom of the rent in my area is like 600 bucks. 600 to >> Okay. I'm just saying you have you have 27 properties and you make 10 grand off of those. That's 370 each on average. >> Yeah. And I've got like five empty right now. >> Got some vacancies, too. What would it look like if you sold a couple of these lowinccome properties and got some nicer properties where you can garner a higher, you know, a higher rent and still pay for them fully in cash and then instead of having 26, maybe you have 10, right? Or maybe you have eight. >> They're higher quality, higher quality tenants, pay more. >> That's kind of what I've been doing. I just sold one last week for 55,000 that I bought for 10. >> Uhhuh. >> But I paid 40,000 in property taxes. >> Okay. last week. >> What about the capital gains on those? >> That's what I'm I don't I don't know. >> Oh my goodness. So, on top of your income, you could have a huge capital gains bill from all these investment properties that appreciated since 09 when you bought them for, you know, pennies on the dollar. >> But I've never depreciated any of them either. >> Wow. You need I think you need help. I think you need somebody to help you with the the financial like the books on this and help you to understand what it is that you're doing. >> Yeah. Well, I also had a secretary that um was embezzling money too in the last >> Goodness gracious. >> Wow. I think I think the word for you in the new year if because I'm already talking about the new year is simplification. You need to simplify your life. >> You got a lot going on. >> Yeah. But right now, you've just been ignoring it and it's just compounded and compounded and so now it feels so overwhelming. So I would jump on ramiesolutions.com, get in touch with a tax pro today and they're going to have their hands full with you. You might be their full-time client for the next few months as they uncover and turn over every stone that you have left to rot. So goodness gracious, Claude, I'm sorry you're dealing with this, but man, neglecting the problem is not going to make it go away, especially when it's the IRS. Wow. >> Good luck. Create your free every dollar budget today.