Yikes----Your new nephew -in -law may have some real trouble some day. He has not been filing tax returns or reporting his income, so that means he is going to have a huge mess someday if he needs Social Security and Medicare. Sounds like he has been self-employed and has not been paying the self-employment tax he was supposed to be paying all along to pay in to Social Security and Medicare, along with not paying ordinary income tax. If he has been young and healthy, that may have seemed fine to him----but if he develops a serious health condition and suddenly needs help---it will be a mess. (I speak from being familiar with a close family member who went through this----also a skilled mechanic btw)
You do not mention whether they have children. The disadvantages to filing separate returns include losing out on some of the child-related credits like earned income credit and childcare credit or education credits if they have a college student. But, your niece may not want to see her refund seized for his tax mess, so she could file married filing separately, at least for 2024.
They really should consult a tax attorney to help them sort out this mess and help devise a plan to get nephew-in-law current with the IRS and Social Security.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
