"We Haven't Filed Taxes Since 2020"

Summary

Podcast Summary: "We Haven't Filed Taxes Since 2020"

Podcast: The Ramsey Show Highlights
Date: March 25, 2026
Host: Ramsey Network (Dave Ramsey, Rachel Cruze, Financial Expert/Coach, Todd)
Duration: Under 10 minutes

Overview

This episode features callers with pressing money and life questions, focusing primarily on a couple’s struggle with unfiled taxes due to years of chaos caused by addiction, and a second caller seeking advice about purchasing a Harley Davidson motorcycle. The hosts—led by Rachel Cruze and Dave Ramsey—deliver practical, urgent financial coaching with a clear, candid tone.

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Key Discussion Points & Insights

1. Overcoming Financial Consequences after Addiction

(00:11–05:55)

Background:
The first caller, a stay-at-home mom, shares a candid account of her family's history. Her husband, a small business owner, battled alcoholism for many years, resulting in financial disarray and not filing taxes since 2020. Three years into sobriety, their business is finally thriving, but they face a "looming black cloud" of unfiled tax returns.

Discussion & Advice:

• Urgency of Filing:
  Rachel Cruze immediately stresses the legal severity of not filing taxes:

  "Failure to file income tax returns is a federal criminal offense." – Rachel Cruze [01:08]
  Notably, she distinguishes this from failing to pay taxes, which does not typically result in jail.

• IRS and Filing Strategy:
  Rachel reassures the caller that the IRS is generally lenient when individuals "come out of the cold" willingly:

  "The number of times that the IRS prosecutes someone who comes out of the cold, off the grid, on their own is almost zero." – Rachel Cruze [01:47]

• Action Plan:

  • Immediately contact a reputable tax preparer, preferably a Ramsey Solutions Trusted Pro.
  • Reconstruct the last 3–4 years' tax documentation as accurately as possible, even if records are incomplete.
  • File the overdue returns and address any back taxes with a payment plan if needed.

    "You need to file something because they're probably not going to look at it. They're probably just going to be happy that somebody just showed up and started giving them money." – Rachel Cruze [02:45]

• Employee Classification:
  There’s a red flag regarding tax documentation for 1099 employees in the husband's business. Rachel notes that many entrepreneurs misclassify workers as 1099:

  "I think you're going to find when you delve into this that they're not really 1099." – Rachel Cruze [04:04]
  She suggests the tax advisor address this as well.

• Financial Standing:
  The family is in a relatively strong financial situation post-recovery, with household income back up and their debts mainly in houses, cars, and some credit cards.

  "We're bringing in close to 20 to 30,000 a month... probably making five grand a month [after expenses]." – Rachel Cruze & Caller [05:13–05:28]

• Hopeful Perspective:
  The hosts highlight that in rough years, the family may not owe as much tax as feared. Proactive communication with the IRS is crucial:

  "It may not be as bad as you think when you actually... taxes on it if you didn't make much." – Rachel Cruze [05:34–05:37]
  They encourage, "Come in out of the cold as quick as you can." – Rachel Cruze [05:54]

Memorable Quote:

"People do not go to jail in America for not paying taxes. They do go to jail... for not filing." – Rachel Cruze [01:22]

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2. Should I Buy a $50,000 Harley?

(06:07–08:45)

Background:
Todd from Lexington calls in, debating whether or not to buy a new $50,000 Harley motorcycle. He and his wife are nearing retirement. They have no debt, substantial retirement savings, and good cash reserves. Todd's wife is already retired, and he plans to retire in five years.

Discussion & Advice:

• Can You Afford It?
  Rachel responds directly:

  "I would buy the Harley, but I also would tune up my investments and make sure we're putting a good amount because you're making really good money and you could really stack some cash and buy a lot of things later that you want to buy. But right now you can afford the Harley for sure." – Rachel Cruze [07:03–07:13]

• Asset Values and Priorities:
  Rachel brings attention to the disproportionate value of a motorcycle compared to daily vehicles:

  "You understand that your motorcycle is going to be your most expensive vehicle now, right?" – Rachel Cruze [07:54–08:00]
  Todd affirms, and it’s acknowledged that the new Harley will depreciate.

• Retirement Preparedness:
  Rachel advises Todd to consult with a SmartVestor Pro to optimize investments:

  "If you're making 350, you should have more money stacked than what you've got stacked. So I want you to increase your investment goals so that you have got millions later to do stuff with." – Rachel Cruze [08:11–08:45]

Memorable Moment:
Rachel brings some levity to the financial reality:

"Your toy is worth more than your other cars that you drive every day." – Rachel Cruze [08:00–08:05]

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Notable Quotes

• "Failure to file income tax returns is a federal criminal offense." – Rachel Cruze [01:08]
• "The number of times that the IRS prosecutes someone who comes out of the cold, off the grid on their own is almost zero." – Rachel Cruze [01:47]
• "I don't care. We have to reconstruct something. The best you can do." – Rachel Cruze [02:37]
• "Come in out of the cold as quick as you can." – Rachel Cruze [05:54]
• "Your toy is worth more than your other cars that you drive every day." – Rachel Cruze [08:00–08:05]
• "If you're making 350, you should have more money stacked than what you've got stacked." – Rachel Cruze [08:11–08:45]

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Timestamps for Important Segments

• [00:11] – Caller’s family and addiction backstory
• [01:08] – Legal seriousness of not filing taxes
• [01:47] – IRS approach to voluntary filers
• [02:07] – How to get professional tax help and reconstruct records
• [04:04] – 1099 contractor warning for small business owners
• [05:02] – Family debt and current income assessment
• [05:54] – Urgent advice to contact the IRS proactively
• [06:07] – Caller Todd wants to buy a $50,000 Harley
• [07:03] – Can Todd afford this big purchase?
• [08:00] – The Harley as his most valuable vehicle
• [08:11] – Retirement, investments, and financial priorities

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Tone and Takeaways

The hosts remain compassionate, direct, and sometimes humorous, focusing on clarity and actionable advice. Their style combines tough love ("Come in out of the cold as quick as you can") with reassurance and practical solutions, making the episode candid and constructive for anyone overwhelmed by tax or major purchase decisions.

Transcript

[Dave Ramsey]

In today's digital world, you need ID theft protection. That actually works. Protect [e-mail] I have been married about

[Caller 1 (Stay-at-home mom)]

20 years and 15ish years of that marriage. My husband was an alcoholic and he has his own business, and he was able to maintain that. He is now three years sober.

[Rachel Cruze]

Good.

[Caller 1 (Stay-at-home mom)]

And yes, thankfully. And he is back on track. But in the midst of the chaos, we have not filed our taxes since 2020, and I'm.

[Dave Ramsey]

Midst of what chaos?

[Rachel Cruze]

He was drunk for 20 years. When did the chaos happen?

[Caller 1 (Stay-at-home mom)]

Well, he just. It really was a downward spiral. It just got worse and worse. He even had a couple of DUIs, so it just kind of reached a peak.

[Rachel Cruze]

So 20 to 23 was him going to the bottom and 23 to now is coming back out.

[Caller 1 (Stay-at-home mom)]

Yes, exactly.

[Rachel Cruze]

I gotcha.

[Caller 1 (Stay-at-home mom)]

And now his business is thriving and we're doing really good. But this is just like a looming black cloud over us because I know we have to pay the piper.

[Rachel Cruze]

Yeah. Okay, so the first thing to know is this, and it's very, very serious. Failure to file income tax returns is. Is a federal criminal offense.

[Todd]

Yes.

[Rachel Cruze]

Failure to pay taxes is not.

[Caller 1 (Stay-at-home mom)]

Okay.

[Todd]

Yes.

[Rachel Cruze]

Okay. People do not go to jail. People. People do not go to jail in America for not paying taxes. They do go to jail, around 2,500 to 3,000 of them each year for not filing. So we've got to get that off of you. The number of times that the IRS prosecutes someone who comes out of the cold, off the grid on their own is almost zero. So you're going to initiate this filing immediately.

[Caller 1 (Stay-at-home mom)]

Okay.

[Rachel Cruze]

I don't want them accidentally finding you in the next 30 days and really screwing up all of the positive progress he's made in the last three years.

[Caller 1 (Stay-at-home mom)]

Yeah.

[Rachel Cruze]

Okay. So go to Ramsey. Go to ramseysolutions.com and get one of our tax elps, and they will help you. Typically, what happens is you need to reconstruct the last three years, maybe four, and do the best you can to reconstruct those years and file those, and then all of those taxes will be due.

[Caller 1 (Stay-at-home mom)]

Okay. And that's another thing. I don't even know that during that time period, he kept a very good record.

[Rachel Cruze]

I don't care. We have to reconstruct something. The best you can do. You're going to have to pull it together because you need to file something because they're probably not going to look at it. They're probably just going to be happy that somebody just showed up and started giving them money. Okay. But. But that's if you go to them. So do not put this off another year. Danger, danger, danger.

[Caller 1 (Stay-at-home mom)]

Yes. I don't want to go to jail.

[Rachel Cruze]

Well, it's not you, it's him.

[Dave Ramsey]

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[Rachel Cruze]

Well, it's not you, it's him.

[Caller 1 (Stay-at-home mom)]

Yeah.

[Rachel Cruze]

Are you working outside the home during this time?

[Caller 1 (Stay-at-home mom)]

No, I'm a stay at home mom. But I do help him with the business.

[Rachel Cruze]

I know, but there's no other tax. There's no other tax bill other than the profits from the business?

[Caller 1 (Stay-at-home mom)]

No, no.

[Financial Expert/Coach]

And you're not an employee of the business?

[Caller 1 (Stay-at-home mom)]

I'm just a co. Listed as a co owner.

[Rachel Cruze]

Does he have employees?

[Caller 1 (Stay-at-home mom)]

He has two, but they're just 1099. So they do their own taxes and everything?

[Todd]

Yeah.

[Rachel Cruze]

Okay, well I think you're going to find when you delve into this that they're not really 1099.

[Caller 1 (Stay-at-home mom)]

Okay.

[Rachel Cruze]

Because you have to meet several guidelines to be 1099 employee and I've got a feeling these guys don't. 1099 sometimes with entrepreneurs is. I just don't want to file taxes so I'm going to make the team do it. But 1099 is for a self employed person. Your employees are not self employed.

[Caller 1 (Stay-at-home mom)]

Okay.

[Rachel Cruze]

So I don't think you know, but you're. Again, that's a minor thing but your tax advisor can tell you about or your tax preparer can help you figure that out. But you need to get two or three, I mean three or four years with a, with a Ramsey trusted tax preparer and get it filed immediately. And then if you owe some money, you can put that on a payment plan with them and, or use some money you got in the bank and just pay them.

[Caller 1 (Stay-at-home mom)]

Yeah, and I'm ready to do that. I just want to be in good standing.

[Financial Expert/Coach]

What's your financial situation now? How much debt do you guys have and what's the income?

[Caller 1 (Stay-at-home mom)]

We don't have a ton of debt, maybe 100 grand. And that is in houses and cars and a little bit of credit card, but we're bringing in close to 20 to 30,000amonth.

[Rachel Cruze]

Month A Month net profit or gross?

[Caller 1 (Stay-at-home mom)]

Gross. There is some like equipment purchasing and paying employees in that amount.

[Rachel Cruze]

Yeah. Okay, so. So you're probably making five grand a month.

[Caller 1 (Stay-at-home mom)]

Yeah, yeah.

[Rachel Cruze]

So $60,000 a year.

[Todd]

So.

[Rachel Cruze]

And I'm guessing in the bad years you might not have made anything.

[Caller 1 (Stay-at-home mom)]

Yes.

[Financial Expert/Coach]

It may not be as bad as you think when you actually be much

[Rachel Cruze]

taxes on it if you didn't make much.

[Caller 1 (Stay-at-home mom)]

Okay, that's what I'm hoping.

[Rachel Cruze]

So, yeah, let's just get all this pulled together and be proactive in approaching the irs. And I make fun of them and pick on them all the time, but they're actually pretty good to work with in these situations. If you come to them, don't wait

[Financial Expert/Coach]

for them to come after you.

[Rachel Cruze]

You don't get the men and you don't want the men in black showing up with a gun. Right, but that's, you know, that kind of thing. But that's, yeah, go. Come in out. Come in out of the cold as quick as you can. Todd is in Lexington, Kentucky.

[Dave Ramsey]

Hey, Todd, how are you?

[Todd]

I'm doing great. How are you?

[Rachel Cruze]

Better than I deserve. What's up?

[Todd]

So I was, me and my wife, we. We're looking to buy a new Harley.

[Rachel Cruze]

How much?

[Todd]

It's 50,000.

[Rachel Cruze]

Got 50,000?

[Todd]

Yeah.

[Rachel Cruze]

Okay. Yeah, it's $50,000 Harley and you've got 50,000 cash?

[Todd]

Yes, we do.

[Rachel Cruze]

Okay.

[Caller 1 (Stay-at-home mom)]

All right.

[Todd]

Yeah, we have well, like 450 in retirement and then 350. About 350 cash or a little more. And I just, you know, I just wanted to retire and like I'm looking to retire in about five years. She's already retired and I just want to be, you know, just want to be smart with my money. Yeah.

[Rachel Cruze]

Have you got any debt?

[Todd]

No, none.

[Rachel Cruze]

What's your household income?

[Todd]

About 3 to 3:50.

[Rachel Cruze]

Yeah, I would buy the Harley, but I also would tune up my investments and make sure we're putting a good amount because you're making really good money and you could really stack some cash and buy a lot of things later that you want to buy. But right now you can afford the Harley for sure.

[Todd]

Okay.

[Financial Expert/Coach]

What kind of vehicles and toys do you have right now?

[Todd]

Really? No, I mean. Well, I actually do. I do have a Harley now that's worth about 15,000. I'd probably just sell outright. And then we have a paid off 23 Tahoe and a paid off 22 Silverado pickup. And then I have a vehicle that I use for my business. I just, I work a full time job for the federal government and I'm electrical inspector on the side. And then I also build houses.

[Rachel Cruze]

And say, you understand that your motorcycle is going to be your most expensive vehicle now,

[Todd]

right?

[Rachel Cruze]

Your toy.

[Todd]

Yeah.

[Rachel Cruze]

Your toy is worth more than your other cars that you drive every day.

[Todd]

Yeah, that. That's what. That's. That's one of my. I mean, that's what.

[Financial Expert/Coach]

And it's going to be worth 15 grand when you go to sell it. So just know that going into it,

[Rachel Cruze]

you're going to lose the money. But you've got the money to burn it, okay? You got the money to enjoy it. And it's not out of line. I might have pause in doing it, but it's not out of line. You're not too broke to do it, but I want you to sit down with a smartvestor pro and make sure all of your money is invested. And if you're making 350, you should have more money stacked than what you've got stacked. So I want you to increase your investment goals so that you have got millions later to do stuff with.

[Dave Ramsey]

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