Mom was a business owner and hid her dementia for years, all the while neglecting (literally forgetting) to pay the business taxes.

Penalties and interest can be huge amounts but may be negotiable. I've been through a business tax audit. If I were in your shoes I'd spend the money to consult with a good tax attorney. Don't talk to the IRS without representation.

Pure and simple, it is Lawyer time. They may advise you make an appointment with the IRS with all the info you have. This is not going to be the first time this has happened and they will likely appreciate that it is not "on you" and that you are doing all you can to provide what you can. Bring all records you have of what she DID file, if anything, of what she kept records of, or anything you know. Yikes! Please update us how it goes.

Since this is federal taxes.....The IRS can garnish her social security, that much I know for sure. They can only garnish a small % though. The IRS can also seize her retirement account but that doesn’t mean they will. The IRS can seize her money. But again, no one can here can tell you what will happen for sure. Good luck, this sounds like a mess!

Oh boy, I'd get a lawyer involved asap if I were you. In Canada the fines can be worse than the unpaid taxes and kept growing until it was resolved, and they can even garnish part of your government pension for this.

Don't know about this stuff but have heard that there are attorneys who are specialized in geriatrics. Since this was a dementia issue. Just wanted to put that out. Best of luck.

Ok, this is bad, actually she could actually go to prison for this. The real biggie is that she deducted from employee's pay check and did turn over the funds to the government, now you have fraud, as since she did not turn over the money, the employees SS and so on was not credited to the employee, the government does not take kindly to this, and then there is the IRS. Yes, everything can have a lien placed against her assets, of any kind. My recommendation is to sit with an Enrolled Agent, it is the highest level of tax preparers, this person can represent your mother in court if need be. Do not go to H&R Block or one of those preparers, they, under no circumstance are qualified to handle this mess. Step one is to get her back IRS taxes filed...do not attempt to do this yourself. Has she been declared mentally incompetent? This is an important factor.

Need more infro, are you talking about IRS taxes, or other, such as she collected withholding for SS from her employees and did not pay the government what she withheld. Or was this a retail business and she collected sales tax and did not pay to the state?