Filing taxes and FAFSA?

Question

Hello. I've been interested in getting some aid to go to school but haven't seen an answer to a problem I'm sure I'm in.

Please bear with me and the story:

I'm only 22 and have been working for 5 years, but have really only paid my taxes once. I was in a 1099 business most of that time and received 1099s for my work. The first year I was W2d and got a refund of about $10 when I filed. Since being 1099d, I paid once in one quarter but couldn't keep paying from then on. The IRS wanted a little more then $5100 per quarter from me (that's over $20,000 a year) but at the time I wasn't even making $4000 per month. I simply ignored the green IRS check slip-things and envelopes from then on as I needed money to live, plain and simple.

In addition to that, I recently found out that I am not old enough to get aid (regardless of my own tax issue) because I'm young and have to involve my mom. But, she hasn't filed her own taxes in over 10 years!

I know neither of us is in a position to file or pay what is a large sum of money. You know, like the power bill or even rent, let alone the IRS.

I'd love to go to school and get out of my line of work. Does anyone have any suggestions or been through this? I'm tired of explaining this story and having a counselor hang up on me or tell me to leave their office with no answers.

Thank you all so much!

Answer 1

To receive federal aid a student must:

Be enrolled as a regular student in an eligible program

Be qualified to study at the post-secondary level

Make maintain satisfactory academic progress

Be enrolled at least half time

Not have been convicted of the sale or possession of drugs while receiving previous aid

Not be incarcerated

Be a citizen or eligible non-citizen

Not be in default on a previous federal student aid loan

Not owe money for an overpayment of a previous grant or loan

Not have exceeded Stafford program borrowing limits

AND MOST IMPORTANTLY (in your case)

An applicant is not eligible to receive federal financial aid if the applicant's property is subject to a judgment lien for a debt owed to the United States government.

If the IRS has placed a lien on your property for failure to pay a federal tax debt, or make satisfactory repayment arrangements, you would not be eligible for financial aid.

(If you tell your school that you have a federal tax lien, they are not allowed to disburse funds to you)

I think that's where your problem arises - if you're telling a financial aid counselor that you're in debt to the IRS, they're not going to be able to qualify you for federal aid.

Which does bring me to another point - if you're not paying taxes - why would you expect that other taxpayers' funds should be given to you so that you can attend school? Federal financial aid isn't make-believe money, or money that the Department of Education farms in the fields behind the building - federal financial aid is taxpayer money, just like the money that builds roads and bridges and pays social security checks and funds the military and feeds the poor overseas.

If you're saying that your family doesn't voluntarily pay taxes, why should other taxpayers help you pay for school?

I think that's also why all these financial aid counselors are asking you to leave their offices - perhaps they're insulted.

Stop hiding from your tax debt and make payment arrangements with the IRS, and then you'll be fully qualified for federal student aid - you don't even have to have paid back everything you owe - but you do need to reach an agreement. You're not going to be able to continue to hide from the IRS - they will eventually collect, one way or the other. If you're worried about dealing with them, contact a debt settlement help company, in order to learn about your rights.

Good luck to you.