Mabel had been having difficulty gathering the necessary paperwork to prepare her taxes last year and was referred to me by a friend who volunteers helping seniors with their taxes at the senior center in Mabel’s town. Mabel was 82, with five adult children, and had been divorced and on her own for many years. Mabel lives a very frugal lifestyle in a very small apartment in Section 8 housing.

When I met Mabel, I also noticed that she was having issues sorting and managing her mail. It appeared that she was a paper hoarder (she saved everything!) and clearly needed my help.
I spent our initial meeting (as part of my free one-hour consultation) talking with Mabel about her goals relative to our work together. I asked her, “What keeps you up at night?” to understand her biggest pain points. And, I asked, “What would success look like for you?” to help us define goals for this engagement.

When we started our first session, I spent the majority of time going through the paperwork that had been accumulating over the years. We looked in her desk, under her desk and on top of the desk. We sifted through the piles that had accumulated on the floor, and on other surfaces in her apartment. We checked files in the file cabinets and went through weeks and months of unopened mail. Because the priority at the beginning was gathering additional information so that she could complete her taxes, we specifically looked for financial related paperwork. While we were in the process, I kept my eyes open for evidence of scams or fraud, overlooked investments and unpaid bills. I then set up a filing system for her, initial focusing on financial and legal documents, categorizing investment and bank accounts, tax-related documents, and medical expense reimbursement information. By doing this and keeping up with the current inflow of mail, we could then ensure that tax time the following year would be much less stressful.

In gathering the data, I was also able to put together a full financial picture for Mabel and her family. We looked at assets, liabilities and monthly cash flow (her budget). We discovered that she had four separate real estate investments and several investment accounts, the total value of which was almost $1 million! Mabel was unaware of what she had, and didn’t really need to live such a frugal lifestyle (eventually we broached the topic of her eligibility for subsidized housing).

In her piles of paperwork we found a number of notices from the IRS stating she owed taxes for several of the previous years. Although she’d been filing taxes with the help of volunteers, she apparently hadn’t supplied all her tax-related information, possibly because of her lack of an organized filing system. Another possibility was cognitive decline. In my work with seniors I’ve found that as they age, some folks start to lose some cognitive abilities, which often will show up in a decreasing interest or ability to handle simple math functions, such as balancing a checkbook.

Mabel had also been incurring penalties due to non-payment of past-due taxes. This is when I reached out to my network of professionals (remember it takes a village) and brought in an Enrolled Agent who specializes in working with seniors. It turned out that the IRS notices were related to stock that Mabel had sold years ago. We hadn’t been able to find any of the original purchase or sale documents. So, I put on my financial advocate hat, determined to find out the original purchase price and hopefully avoid her having to pay capital gains. I did the research and put together a paper trail that resulted in a strong case that was presented to the IRS, turning the initially assessed taxable gain into a very real loss, thus avoiding taxes and penalties. The amount she saved through my efforts more than paid my fee!