The Ramsey Show - App - I Owe $94,000 to the IRS! (Hour 3)

Episode Date: August 4, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in. We'll talk about your life and your money. Open phones at 888-825-5225. That's 888-825-5225. My co-host today on the air, Chris Hogan, Ramsey personality number one, best-selling author.

We are here to answer your questions. Justin starts us off this hour in Moore, Oklahoma. Hi, Justin. How are you? Hey, Dave. How are you doing? Great. How can Chris and I help? Well, I'm a little bit frustrated and a little bit discouraged. So I'm back on baby step two as of about 10 months ago. I ended up selling a car last month for $4,500 that had 250,000 miles on it,

and I bought a cheaper car, an $1,800 car from a neighbor. Got it all checked out at the mechanic. My dad is good with cars. He got it all checked out for me. Looked like a really promising deal. Got 1,000 miles down the road, and the transmission went out. That's going to cost me $2,800 to replace this transmission. Not in an $1,800 car.

No, sir. And my other car now has a coolant leak, and so I have to get that checked because I was driving down the road today, and it started overheating. So I put some coolant in it, and I'm taking it to the mechanic. I'm just sick and tired of cars that are breaking down on me and repairs that I'm having to do, and I'm so close to being out of debt. I only have $2,000 of some student loans with my wife and $400 of just consumer debt. We have a household income of $62,000 and we've been

dumping $600 minimum on debt every month. So I'm so close to being done with debt that these cars are just wearing me out and keep on setting me behind. So I'm wondering if you have any advice for me. Man, I'm sorry. You are right there in the battle. I mean, you've got bullets flying all around you, and you are charging the hill to take the hill. You're a warrior, man.

But you get weary, don't you? Especially freaking cars. Cars make me more mad and weary than just about anything else. Cars have been the thing recently. I mean, my old Honda that I, I mean, it was just repair after repair after repair after repair. I'm like, come on, can I please just get ahead? Just one time, give me a break here, car angel. It makes you want to take up firearms and just shoot the crap out of them, right?

That's it. I've thought about that more than once. Hey, that $1,800 one without a transmission is a candidate. I'm just saying, okay. It is a high-end nominee, buddy, yes. Yeah, hey, man, I feel your pain, and I don't blame you. I will tell you that the people that I've walked with, and also when Sharon and I were doing these exact same things,

I've had those exact same feelings. This is like your breakthrough moment emotionally and character-wise. It's going to set you up to win the rest of your life. It's like God is saying, this is a test of the emergency car sucks program, and we're going to see if you can suck it up and push on through just a little bit further because you're near the end, and it's like the devil's trying to trip you right before you get to the finish line. And so you can do this, and you're going to be really glad you did it. It is very hard, and it is unbelievably draining, and it is very frustrating, though. I will give you all of that, but I will also tell you that by God pushing through is worth it.

It's worth it, man, because there's another side to this. The sun will come out tomorrow. His mercies are new every morning. There's another side to this, and the other side of that is one year from today, where are you going to be sitting? You can tell me the math. You're going to be sitting in two much better cars that are paid for and 100% debt-free, and you'll probably have your emergency fund in place one year from today. But you've got to struggle through one more piece of crap car.

You've got to shoot the $1,800 one, go find you another garage sale car to limp on out of the two thousand and then and the other four hundred and then limp on up into the emergency fund and then go by god the first order of business is i'm gonna save some money and get some decent cars that's exactly right justin and the next time the next challenge an obstacle that comes watch how you deal with it see you're going to have some experience under your belt you know that real the things that you desire aren't going to come easy they're just worthwhile baby so you keep pushing you stay focused on this resist the urge to roll up on a lot and grab a payment we're not going backwards this is the point when people hit where you are right now that they turn left and go crazy yep go lease a $20,000 car. And it's all because they just get so pissed off they can't breathe, and they lose hope, and they lose energy.

And no pun intended, but their gas tank is empty, right? Yeah. And so I appreciate you calling. What I want to do is, first, I want you to hear that it would be normal to be mad in this situation, be normal to be hurt, it would be normal to be limping. You've been in battle. You've been swinging the sword, man. I mean, and you got some cuts, and you got some bruises.

But the other thing is that you're either going to lose the battle after getting this close, or you're going to come out the other side and own the whole freaking thing, and that's you're going to come out the other side you're going to fill your tank back up you're going to breathe and go one year from today this is all going to be over and we'll never freaking go back one thing about me having driven that old piece of car crap car that was a friend of mine loan me i didn't even own it there's a cad Cadillac. The predominant color was Bondo. It had 478,000 miles on it. It wasn't an $1,800 car. It was an $18 car.

And I was driving it into my neighborhood. Cops were following me because they couldn't figure out what that car was doing in my neighborhood. You know? I got profiled based on my car. And so one thing about that is I can still feel that in my guts. You can hear it coming out of my voice right now. I still remember that. It was freaking 30 years ago.

And so when somebody bitches about me driving a nice car, you know what I say? Kiss my butt. Because I paid a price to get there. Right? Yeah. I drove the hoopty. I drove like no one else. Now I can drive like no one else.

And you don't like it? Kiss my butt. Justin, if you're not watching on YouTube, I wish you could see how riled up Ramsey is right now. He has literally gone back to exactly where you are. That moment of being just tired of it. And I'm going to tell you something. I can't wait. You're going to have the same kind of

story buddy yeah you're gonna call us and do your debt-free screen you are and then you're gonna get you some dadgum decent cars so you have to drive crap around anymore i don't blame you man i don't blame you firearms should be involved in the disbursement of the 1800 i'm just saying hey justin stay focused buddy hey you know what i didn't do i didn't take any pictures of that cadillac take pictures of that that eighteen hundred dollar that was gonna be a good car that didn't even make it a freaking thousand miles it's part of the story you tell your grandkids and you need the picture yeah you do before you shoot it before you blow it up with dynamite take pictures of it to remember so you you can tell your grandkids, yeah, back in the day, me and your great-grandpa bought this car for $1,800,

and it didn't make it a freaking thousand miles. You'll be telling it when they're sitting on your knees someday, man, when you are winning. Because you're winning at that point, and you built wealth, you become a millionaire. That's where you're going. You've got this. Folks, I love telling you about well-made, well-thought-out products. Today, I'm talking about Grip6 belts. I don't know about you, but I'm not a fan of traditional belts.

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Grip 6 is determined to help build and modernize American manufacturing. To learn more and get this month's Dave Ramsey special, visit GRIP6.com. That's GRIP6.com. thanks for joining us america my co-host on the dave ramsey show today ramsey personality chris hogan number one best-selling author adam is with us adams in santa barbara hi adam how are you doing great dave how are? Better than we deserve, sir. How can we help? Hey, Dave. So my question is my girlfriend.

She is a nurse. She is making approximately $130,000 a year, but she is also $130,000 in debt. I just want to see what your advice would be to go ahead and change her mindset because she's been working hard ever since high school and college. She never partied. She never went out because she was always stressed about money.

Now that she's making all this money, she has this stress with all this debt. I just want to get her on board and and you know be debt free because i i want to marry this girl and uh once we do you know it becomes uh two minds in one person so exactly help her out good well and you can if she's on the right track you can help her out by marrying her um her and continuing the journey. But the thing that I find is, and Chris, you can chime in on this,

is what happens is if people can't see a path to win, then they feel stuck, obviously. The old joke is you need a light at the end of the tunnel that's not an oncoming train. And that's called hope. Sometimes you hear us here on the air, Chris will do it or I'll do it, where hope sounds like a math problem. And you go, oh, I think I can get there. But you hadn't really thought about it that way. See, she's never really thought, now I make $130,000. What did she used to make?

She worked at McDonald's. She worked in retail stores. What did she used to make? $25,000, $30,000, $40,000? If that, because it was mostly part-time. Okay. So now she's got $100,000 extra income and only $130,000 worth of debt. That sounds to me like under two years she's debt-free if she'll keep living like a broke person

and dumping it all on the student loan. See how that math gives you hope? Yeah, and that's basically what I tell her. And one of the biggest things right now is she actually has like $27,000 in the bank right now just sitting. And I want her to kind of give at least $20,000 towards the loans so we can fast track to being debt free. Yeah, Adam, let me ask you this, my friend. You've been dating her how long now? Almost 10 years. 10 years 10 years y'all been together

a long time what is your income uh i barely started my business i'm barely starting you know probably two three grand a month okay luxuries all right and do you have debt adam do you have debt? Adam? Hello? Do you have any debt? Yes, I have debt myself. I'm trying to... How much do you have? Like $10,000, but I'm hoping to get through this year.

Okay. And the reason I'm asking is a lot of times when you're with people like that, and you all have been together a long time. She's probably watching what you do, not just what you say. And so you having an opportunity to live this out, uh, and let's get serious and go get married first and foremost. Uh,

but you guys starting to combine and start to dream out loud and HD. She obviously Dave has some drive because she went from making 25 to 30 to now making 130 when you got a nurse she went and got her degree which you don't get just by attending class you got to be serious so she has some drive now it's just a matter of connecting the drive to a vision and i think that's the missing keys piece right now exactly the bible verse says the where there is no vision the people perish that's right it's when you can't when you don't believe that you can make it to the other side of the road you just stand there and get run over by a car you know when you don't believe you can go win

you just sit and get run over by life and you got to go win she did that with nursing you're right yeah now we got to connect the dots exactly right in hd and go here's how this works but um i i um you know i think maybe you need to change the setting that you're having this discussion uh maybe maybe you guys need let me do this i'll tell you what i'll put you on hold we're gonna sign you up for remsey plus and and put but put her in there and you in there you're running separate budgets because you're not married until you're married. But, you know, and y'all talk about how we can go win and change our lives. Change your life. What'd you say?

They need to change the scene? What do you mean by that? I think they're sitting around discussing this in places where they used to party or something like that, and need a you need to go to a coffee shop you've never gone to before gotcha or sit on a different porch than you've ever sat it said it'd be you always sit on the back porch go sit on the front porch change it and go this is a dream meeting i'm with you you need a you need a different physical surroundings sometimes to kind of jar your spirit loose and i was going to tell adam not only he needs to

change his tone he sounds a little bit like, not only he needs to change his tone, he sounds a little bit like Eeyore. He needs to get some excitement in him. You know, ask some questions. Stop talking so much and let her talk. Ask her some open-ended questions so she can tell you what she's fearful of and what she's thinking because people will tell you if you ask. Yeah, there's a lot going on here.

But I'll tell you what, we'll help you. You hang on. Kelly will sign you up, and we'll get you guys in Ram'll tell you what we'll help you you hang on kelly i'll sign you up and we'll get you guys in ramsey plus and give you something to talk about for sure we may be stirring up trouble brother but we're gonna do it we're good at it scott's in philadelphia hey scott how are you i'm doing well how are you doing dave better than i deserve how can we help all right well i've been listening to you guys since I would say about February or March. And in January, I did something very stupid, as I think you would say.

I bought a brand new car for to the tune of $38,000. So I'm calling you to see if you think that this is something that I can afford and hold on to, or if it's something that you think I need to dump right out right away and, you know, buy something cheaper. Okay. So you said it's a $38,000 car. Yeah. Brand, brand new. So now it's worth 32.

I got that. And, um, you've been listening to us since January or no, since February. Um, yes. Yes. So what is the formula? You tell me. So I currently, so I currently make. No, what's the form you tell me so i currently so i currently make no what's the yeah yeah go ahead you're good you're on it okay yeah so i mean so i i the car is about just shy of 50 of my annual income which i know is very steep um and i've definitely been a car

junkie for a while now for a couple couple years, it's been the first time, but I make about, like you can do the math here, I make about $80,000 a year on average. I work in sales, so it varies. And I have a good, I feel like I have a good savings. I don't own a house I rent. I have about $6,000 in a mutual fund that is managed professionally.

I have $21,000 in a 401k, and split between checking brokerage and physical tax, I have about 100,000. But I still owe 17.5 on the car. So, you know, I feel like I could pay the car off and still be in a good spot. But do you think, you know, the car is too expensive for me to own given my income and where I'm at now? Or do you think it's something that, you know, I can continue to enjoy? There's two rules of thumb we use. Is it less than half your annual income? Your answer is barely. And the other rule of thumb is can you be debt-free other than your home within two years

and still keep the car? And the answer is yes. So can you keep the car? You got a really good cash position. That helps you with the barely, right? So the question you need to ask yourself, and this is the only one you can answer, is you told me, and I'm the same way, by the way, but what I heard you say is cars are a problem area for you.

If you reach and pay this car off and keep it, can you make it the last time you do something stupid with an automobile? If you can't, you need to sell it to prove to yourself that you're not going to do stupid anymore. No, I think it's the last dumb car purchase I make after finding your guy's show. I think it might be. I don't know why I bought it in the first place. You're the only one who can answer that question for sure. No, you're right, Dave.

Boy, Scott, buddy, you've got to make a decision. And here's what the other thing, you've got to dig in and get serious and get this thing, this payment out of your life. Oh, yeah, just write a check. He's got $100,000. He's got a 17-0. Yeah. Write the check tonight.

Keep the car. And then do the spiritual discussion between you and yourself and God. Is am I done being a junkie? Yeah. This is the Dave Ramsey Show. Ha, ha, ha, hasey Personality, my co-host today on the Dave Ramsey Show. On the debt-free stage right here in Ramsey Solutions, real humans are here. Kevin and Kerry are with us, along with the kiddos Connor, Cameron, and Chloe.

A couple of C's involved in this with one big K there, Kevin. Like it. Well done. Welcome, guys. Where do you all live? We live in Cranberry Township, Pennsylvania, just north of Pittsburgh. Oh, cool. Well, welcome all the way to Nashville. Thank you. Good to have you.

And how much debt have you paid off? We have paid off $303,500 in seven years, one month, with $143,000 of that in the last nine months. Whoa. Goodness gracious. What was the income range? It started out about 221. This last year was about 371.

It'll be a little bit north of that this year. Wow. You had some increase. Yeah. What do you guys do for a living? I'm a domestic engineer. I run a sales team for the eastern half of the United States for a consumer package good company.

Oh, wow. I'm the team cheerleader. I got a great teammate, folks, and do a great job selling stuff to retailers around the country. Yeah, you're apparently a great cheerleader. Well done. They don't pay cheerleaders like that if they're not good at it. Well done. Yeah, you're not a petite human being. Did you play some football back in the day? We didn't have a football team where I grew up. Are you serious? I coached up in pennsylvania and i'm going to tell you some large human beings up there we eat well yes some good

people but hard-working uh amazing number of hall of fame people out of that area as well jim kelly joe namath absolutely montana montana mike ditka all of them so don't need to say that so tell me what motivated you guys to get serious about attacking this debt? Well, you know, it's a 25-year success story. And it's funny because, you know, when I was – I've had this conversation with you guys probably about 2,000 times over the last seven years, normally on a treadmill sometime in the morning. And when we knew we were getting close to time because we paid off our house, you know, and we knew we were getting close to time. And I sat down and I started writing down kind of what I was thinking, because I knew we had just a segment. There was only a certain amount of time, and there was so much to tell you. And when I finally came up for air, it was about 63,000 words,

16 chapters, a foreword and an afterword, and this concept and this title called Working for Rachel. And what it was was it's the biblical Rachel and Jacob story, right? Because Jacob had to work for Rachel for seven years. So we thought working for Leah was kind of like the consumer debt part. And then working for Rachel was paying off our home, right? Because when he said, and that was always about the process. Well, verse 20, it says, and Jacob served for Rachel for seven years, but it seemed like but a day because of his love for her.

And all of a sudden, it went from a process to a concept, right? It went to kind of this whole idea of we're now working for Rachel, right? This baby step seven. Because we've always felt like we're your patient zero, right? We're a case study of your everyday millionaire's book, right? I mean, it was like, you know, I look back and I say, we did this and we said, it's a memoir for our grandkids and their grandkids. It's a prayer journal where we went back and said, this is where God showed up here and here and here, just at the right time. And somewhere along the way, there's inspiration and motivation because we are extraordinarily ordinary. I mean, I was a 2.93 student in college. I was on academic probation twice. I was on disciplinary probation once. You know, I couldn't spell CPG if you spotted me the

C and the G coming out of school. But, you know, I punched above my weight when I got married. I married a Proverbs 31 woman, you know, who's worth is far more than rubies. And her, I've had no lack of gain. And, uh you know we've been great partners but there's what seven years ago is when you started the 304 yeah that you knocked out what started that process sure sure you know we uh we bought this house back in 2003 and it was like 60 percent debt to income i mean we stretched into this house i mean because when you're when you're building this house you know you can justify anything. I mean, because it's always cheaper to do it up front versus afterwards.

Well, and you're in sales. You can always make more money. Oh, yeah, yeah. I can out-earn my stupidity. We closed the house in December of 2003 in a five-year arm at a 3.75% rate. Oh, God. And five years from December 2003 was December of 2008. Yes.

Right? So, I mean, we were staring square in the face of a housing crash. And we just got lucky in the sense that Pittsburgh was one of two markets that didn't go down during that time. And we were able to do it. And spent three or four years kind of figuring out and refinancing and feeling better about an amortization schedule. I met you in 2011. We were out in Maui for a 15th wedding anniversary. And all of a sudden this guilt and shame came over me because I'd put the family at so much risk

and it works only when it works and it worked for us. And we were in a good spot at that point. But you know, it was like, I felt like I'd walked through a landmine and hadn't tripped any of the bombs, but I looked back and said, I'm never going to do that again. And I just got really serious about it. Lucky I got both my legs. Absolutely. So we got to 2013. We refinanced for the final time in February of that year.

We did a 15-year, 2.75%, $303,500. And it was not the 15 years didn't matter. The 2.75 didn't matter. What mattered was the $303,500. And I wanted to pay it off in two years, but you say do baby step four, five, and six at the same time, right? So, I mean, so we put back $255,000 for college during that time, saved $300,000 or $400,000 for retirement during that time,

and just slowly but surely knocked it off. And then when a bonus would get bigger than we thought or when stock options would come, we'd just take a big slug against it. You know, we finally got to where we needed to be. And, you know, what's up? Carrie, at what point in this journey did you finally look at him and go, I've been telling you this? Well, you know, it's a scary thing to think like we're in the sacrifices that we were going to have to make to accomplish this.

But he's never steered me wrong. So and he's always been good financially. So I just had to trust. Oh, you didn't. You didn't step up and go. I've been telling you this. No. OK.

All right. Because I'm kind of watching her and I'm thinking she's going. She already knew all this. Yeah. Absolutely. Because I'm kind of watching her and I'm thinking, she already knew all this. Yeah, absolutely. I tell you what's interesting, though, is we paid the house off on March the 12th. I got a bonus on March the 9th. And I talked to my financial advisor and I said, it's within $400 of the balance of the house.

And on March 11th, the world started falling apart. March 12th, I did an electronic transfer to the bank. And it was like God put us in the ark and shut the door, and then the rain came. And we just exhaled, and we have had just economic immunity over these last four or five months, and it has been really comforting

from where it could have been. We've just breathed a sigh of relief through it all. That's about as up to the moment. Absolutely it is. You shut the door, and the rain does come, and they're 100% dead free, and three kiddos, and they're approaching college age, looking at them at rapid pace, and they're ready. This one here is a senior.

You know, I look back as there's like four or five moments, but probably the most important thing we ever did was back when he was born, back for 1999, I did my first budget. I still carry it. I still have it with me, right? We did our first budget, spent like three hours on it. And because I knew she wanted to stay home. And at the time I was making like 40 grand. She was making 32.

You know, she was on her way up in her career, but I knew she wanted to stay home and we figured it out. And I didn't know how we were going to add a mouth and take away an income. But we did the math, and we got it figured out. God bless that decision because we made $72,000 together in 1998, 1999. I got promoted twice that year. Got up to $69,000. It was in our rearview mirror. But she made some really smart decisions in college.

She commuted. She didn't have any student loans. Because even if we could have figured that out, I don't think that she would have stayed home had she had that student debt just out of the guilt that was there. And because that happened, I was able to go do what I do, get on airplanes and go sell stuff. She had the house, you know, taken care of. And, you know, those decisions just stacked upon themselves. And we just ended up in a real good place. So what's this house worth?

Well, the last appraisal I had was in 2012. It was $570. What do you think it's worth? $750. Way to go. Absolutely. Proud of you guys. Well done.

Well, we got a copy of Chris's book. You're already there, but you get to read about yourself. Everyday Millionaires and De debt-free house and everything what a wonderful story you guys rachel leah thing i'll remember that one that was very very good all right kevin and carrie connor cameron and chloe 304 000 paid off in seven years make it 221 to 371 debt-free house and everything count it down let's hear a debt-free house and everything. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Yeah! They will never go back. No, they're not going back. No chance. Well done. Great job, you all. I love it. This is The Dave Ramsey Show. our scripture of the day first timothy 415 practice these things immerse yourself in them

so that all may see your progress benjamin franklin said without continual growth and progress such words as improvement achievement and success have no meaning continual growth and progress well folks investing is particularly weird out there when we have things going on like covid and businesses that are messed up by things going on like covid and uh some people get freaking out let's get real sometimes you jump out of your retirement at exactly the wrong time. You stop investing at exactly the wrong time. Don't do that. You need to have a pro in your corner,

someone that teaches you so that you make your own decisions because you're dealing with someone with the heart of a teacher. If you're ready to invest or you don't have a good pro in your corner, we all use, personally, I do, Chris Hogan does, we all personally use SmartVestor pros. These are people in the business of investing, in the business of advising, and they have the heart of a teacher. They can help you do your mutual fund, help you do a rollover, help you get your kids' college started, help you start

your Roth IRA if you want to do that, start even something for your small business. Whatever it is with your investing side of things, they can do it. And if you want to find the SmartVestor Pro in your area, that is who we recommend. You click SmartVestor at DaveRamsey.com. It'll drop down. You fill out a little form. It'll drop down a list of all the smart investor pros in your area, and then you pick the one that is best suited for you,

and that's how it all works. David is in Martin, Tennessee. Hi, David. Welcome to the Dave Ramsey Show. Hey, gentlemen. How are you doing? Great. How can we help?

Okay. I'm 19 years old. I'm starting my second year of college, and I'm getting $3,600 back from the school from excess scholarships, and I'm on baby step three. not sure what to do with the extra money from that and my girlfriend's wanting to start a small business on the internet and i'm kind of with her on that making t-shirts and candles and i'm i don't i'm not sure if i should do that invest it or just keep stockpiling money i would pile up money and make sure you graduate from school you're just starting don't touch this money leave it in a big pile i don't care if you got $36,000. Yeah. What are you studying, David? I'm studying chemistry right now for my bachelor's degree, but I'm wanting to do orthopedic surgery. Okay. So you got a lot of college expense

ahead of you. Yeah, you do, buddy. That $3,000 won't even spit at. Yeah. So just pile up money, pile up money, any money you can get your hands on other than loans, pile up money. And, and, and listen, moving forward, David, you know, I appreciate, I love business more than anyone else. Uh, we teach and help people open and run and improve businesses. This is not the time for you to try to start anything with the girlfriend. So let's,. So this money is now saved. Let her know that that's the decision you're making so there's no more discussion with it because, you know, I can see her and others having ideas for you and this money. Nah, you got to plan for this.

We're going to stockpile it and you're going to keep growing you and going to school. Yeah, the 29-year-old you doesn't want to be telling stories to his friends about the time that he had three thousand dollars and gave it to his girlfriend for candles that's not that's not a story you want you made that story fast you connected that really quick that's um that's you know i know or you may be telling the story where she goes and makes 20 million dollars and you wish you had but i don't think that'll be the one yeah no no i wouldn't do that i would just pile up the cash you are as a surgeon as a chemistry major you are the best investment you can make matter of fact it's the best investment almost anybody could make because you're investing in education that is going to pay off so just make sure the money's there for that. Just pile up cash, pile up cash, pile up cash.

This is all about you completing your degree. Cesar's in Chicago. Hi, Cesar. How are you? Hey, how you doing, Dave? Great. How can we help? Okay, a little nervous here.

Sorry. First-time caller, first-time listener. I discovered you last summer, started listening to you. Didn't sink in until probably about a month ago. I'm roughly $130,000 in debt, which is $94,000 in hopefully IRS. I'm trying to do what I can to figure out what's the best way to tackle this. Most of the other stuff is car loans and credit card debt. I just went to CarMax this weekend and sold a vehicle, which I had some positive equity

of $6,500. I don't know what to do with this money at this point. What in the world? How do you owe the IRS $94,000? It's a mess. I mean in 2015 and 2016 we had a business, you know. I started a business with my wife. I pretty much tried to manage the business myself, you know, tried to do everything myself and I kind of screwed things up and didn't hope that I had a bad account. I contacted the IRS and there seems to be an issue. I guess we have to file a 1040X form to try to amend those taxes. But while this is in process, I mean, I still have to start making some kind of payment because I'm getting some letters on the mail as far as you know. Okay, wait, wait, wait. Stop, stop, stop, stop.

So you're saying that the returns were filed improperly, and you may not actually owe this money when you file amended returns? Exactly. Okay. You have some money. You said you had $6,000 from sale of your car? Yes, $6,500. And I am currently on baby step two, so I got my $1,000.

Stop, just stop. You're going to spend some money right now on a tax attorney or a tax professional that is a stud of some kind. And if it costs you $6,000, it won't. But if it costs you $2,000, this is job one right now. Yeah. You can take your $130,000 and wipe out 94 or a big portion of 94 with some simple proper filing.

You don't do that yourself. That's how you got here. You go get a tax pro, check DaveRamsey.com, and click on our tax ELPs. If there's not one in your area start shopping around talk to some business guys that are that are competent business people in your area ask them for advice on who a good tax attorney or a tax pro is and let them dig in i don't you don't need to do anything you don't worry about baby steps no this is job one irs yes job one that's what

you're doing and and caesar make the area focus don't come up with excuses pick up the phone call set up a time to go sit down gather up find out all the documents you're going to need because you're going to have to do legwork here but trust me it's worth it because it's dealing with the irs yeah you you know you're you're a good tax professional can tell you if you need to get on an installment plan and what level you need to do to get the barking dogs off your heel while you get this stuff filed but dude you don't wait 30 seconds you get this stuff filed now this is an overdue term paper and you've you know this is killing you yeah and these people have unlimited freaking power it is unbelievable what they can do to your life if they choose to

so i really really really want them um to go away yes i want you to get the paperwork done and you don't have anything that's more important in your life for the next two weeks other than get all of this filed as soon as possible don't don't drag it out three months don't drag it out two months file the stuff get with somebody get the work done you state you know get you a cup of coffee and work into the work into the wee hours of the morning get this done baby whatever they tell you to do because here's the reality it. Some tweaking in the proper filings, again, has the ability to wipe some of this out. This is a huge opportunity. Sounds like a good portion of it can be wiped out.

It really can. It's like they've impugned it on him because he didn't do proper filing, and they guessed. That's right. And the IRS never guesses low. Low. It's a rule of theirs. It's written somewhere in a book, I'm sure. I've dealt with them.

Oh, God. Oh, me too. You just get interest in the penalties on this stuff, and it all goes away with properly amended filing, or a large portion of it does. Yep. Then that's the stuff you should have been working on all these years. A long time ago. Yes. And then, once that's out of the way, you're down to just $40,000 worth of debt.

Now you go attack your debt. That's right. Chris Hogan, good work today. Thank you, sir. It's a pleasure to be with you. This puts this hour of the Dave Ramsey Show on the books. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener.

I'm Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. of the Ramsey Network anywhere with the Ramsey Network app on your smartphone. Catch all of our full shows, browse by topic, or send clips to your friends. Head to the App Store and download

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