Has anyone here ever had these codes and then had their refund actually reduced? I'm seeing 570/971 on mine too but also code 420 which apparently means "examination of tax return" which sounds even more ominous!

I've dealt with these exact codes before and understand the anxiety! Code 570 with 971 is actually pretty common and usually resolves without major issues. The key thing to remember is that 570 doesn't mean something is wrong - it just means they're taking a closer look at something on your return. In my case last year, I had these codes appear about 10 days after my return was accepted. The 971 notice arrived about 2 weeks later asking me to verify my filing status and dependent information. I sent the requested documents and my refund was released about 3 weeks after that with code 571 showing the hold was lifted. The waiting is definitely nerve-wracking, but try not to panic. Most of these reviews are routine compliance checks rather than indicators of problems. Keep checking your transcript every few days - you'll likely see additional codes appear that will give you more information about what's happening.

One thing nobody has mentioned - make sure you respond to the CP2000 notice within the deadline even if you're still gathering documentation! You can send a letter stating you're disputing the assessment and are in the process of preparing your documentation. This buys you time while still meeting their response deadline.

I went through this exact situation two years ago and can confirm what others have said - you absolutely can fix this! The key is being thorough in your response to the CP2000. Here's what worked for me: I filed separate Form 8606s for each year I made Roth contributions (you don't need to amend your entire returns), then sent a detailed response letter explaining that the withdrawal was primarily a return of already-taxed contributions. I included a timeline showing each contribution date and amount, plus copies of my brokerage statements. The IRS initially wanted about $4,200 in additional taxes from me, but after reviewing my documentation, they agreed I only owed taxes and the 10% penalty on the small earnings portion (about $180 in my case). The whole process took about 10 weeks, but it was completely resolved. Don't panic - this is more common than you think and the IRS deals with these situations regularly. Just make sure you respond within their deadline and include all the necessary documentation to prove your contributions were made with after-tax dollars.

One more thing nobody's mentioned - if your divorce was finalized last year and those transcript amounts are from joint returns, keep in mind you might have innocent spouse relief options if there are issues with those returns. The "TP Tax Figures" entries themselves are just IRS accounting codes, but if you think there might have been financial hiding during marriage, consider consulting with a tax attorney. Especially with those consistent $23k-$32k figures you mentioned, it might be worth having a professional review your past joint returns to ensure everything was reported properly. Your ex might not have been hiding retirement accounts specifically, but could have been hiding other income or assets.

I'm also going through a divorce situation and dealing with confusing IRS documents! This thread has been incredibly educational - I had no idea that those "TP Tax Figures (Reduced By IRAF per Computer)" entries were just normal processing codes. I was also convinced they meant something more significant. What I'm finding most valuable is how everyone has broken down the investigation process into manageable steps. The Form 4506-T approach for getting wage and income transcripts seems like the logical starting point, and having specific things to look for (Form 5498s, W-2 Box 12 codes, Schedule 1 deductions) makes it feel less overwhelming. I'm curious - for those who've been through this process, how long did it typically take to receive the wage and income transcripts after submitting Form 4506-T? I'm eager to get started but want to set realistic expectations for the timeline. It's really reassuring to see so many people who've successfully navigated this same confusion. The community support here is amazing for those of us trying to understand our financial situation after divorce!

Based on my experience helping clients through this exact situation, I can confirm that if the IRS accepts your reasonable cause for the late S corp election, they typically won't impose penalties for the corresponding late 1120S filings. The key is that your reasonable cause needs to cover the entire period of delay. A few practical tips from what I've seen work well: 1. Be very specific about dates in your explanation letter - when the health issues started, how they prevented you from handling business matters, and when you were able to resume normal activities 2. Include a timeline showing you filed as soon as reasonably possible after the circumstances resolved 3. Consider attaching a brief statement from a medical professional if the health issues were severe enough to warrant it One thing to budget for though - even if penalties are waived, you'll still owe any additional taxes that result from the S corp election. The reasonable cause covers penalties and interest on late filing, but not the underlying tax liability differences. Also worth noting that the IRS has been more lenient with reasonable cause determinations post-COVID, especially for family health emergencies. Your situation sounds like it has strong merit for approval.

This thread has been incredibly informative! I'm dealing with a similar reasonable cause situation for my late S corp election due to a serious car accident that left me hospitalized and unable to handle business matters for several months. Reading through everyone's experiences, I feel much more confident about my chances of approval. The detailed advice about documentation, timelines, and what to include in the reasonable cause letter is exactly what I needed. I especially appreciate the tips about certified mail delivery and keeping detailed records of everything. One question for those who have been through this process: Did any of you face additional scrutiny from the IRS during the review process, like requests for additional documentation or follow-up questions? I want to make sure I'm prepared with comprehensive documentation from the start to avoid delays. Also, for those using professional help (whether tax preparers or services like taxr.ai), did you find it worth the investment given the complexity and potential penalties at stake? I'm trying to decide whether to tackle this myself or get professional assistance. Thanks to everyone for sharing their experiences - this kind of real-world insight is invaluable when dealing with IRS procedures!

Wait, I'm confused about something else. You mentioned you're in school full-time - are you receiving any financial aid or scholarships? Some of those might be taxable too, and you might qualify for education credits like the American Opportunity Credit or Lifetime Learning Credit. Those could be worth looking into even if you don't have much other income!

I've been following this thread and wanted to share my experience as someone who went through a similar situation. I was a stay-at-home parent receiving various benefits and was completely overwhelmed by the tax implications. What really helped me was creating a simple checklist of all my income sources and benefits for the year - disability payments, any unemployment, financial aid, even small freelance work I'd forgotten about. Then I gathered all the tax documents (1099s, W-2s, 1098-T from school, etc.) before trying to figure out what was taxable. The key thing I learned is that even with very low income, filing can often get you money back through credits you didn't know you qualified for. In my case, I got refunds from education credits and the Child Tax Credit even though I thought I wouldn't owe or get anything back. Also, if you're unsure about anything, don't hesitate to reach out to a tax professional or use some of the resources others have mentioned. The peace of mind of knowing you've filed correctly is worth it, especially when you have kids depending on you. Good luck!