This sounds exactly like what happened to me last year! The sudden doubling of both OASDI and federal withholding is definitely a payroll system error - I've never seen a legitimate tax scenario that would cause that exact pattern. What likely happened is your payroll system applied the tax calculations twice, probably triggered by your recent promotion or a system update for the new tax year. The fact that you're seeing around 12.4% for OASDI instead of the standard 6.2% is a dead giveaway - they're incorrectly deducting both the employee portion AND the employer portion from your paycheck. When you meet with HR on Monday, be prepared with specific numbers. Calculate the exact percentages and bring printed copies of both your normal paycheck and this reduced one. Don't let them brush you off with vague explanations about "tax adjustments" - the math clearly shows something is wrong. Ask them to show you the actual tax calculation screen in their system if possible. Sometimes seeing how their software computed the numbers makes the error obvious to everyone involved. And definitely push for the correction to be processed on your very next paycheck rather than "we'll look into it over the next few weeks." Keep detailed records of exactly how much was overwitheld so you can verify their correction is complete. This type of glitch is usually fixable once properly identified - you'll get your money back, just stay persistent with HR until it's resolved!

This is definitely a payroll system error - the simultaneous doubling of both OASDI and Federal Withholding is a classic sign of duplicate tax calculations being applied to your paycheck. What's most likely happening is that when your promotion was processed or during a recent system update for the new tax year, the payroll software got confused and started applying your tax withholdings twice. The 12.4% OASDI rate you're seeing is particularly telling - that's exactly what happens when the system incorrectly deducts both the employee portion (6.2%) AND the employer portion (6.2%) from your check, when it should only be deducting the employee portion. Before your HR meeting on Monday, document everything clearly: - Print copies of your last normal paycheck and this problematic one - Calculate the exact tax percentages being withheld (OASDI should never exceed 6.2% of gross wages) - Note the specific dollar amounts that were overwitheld When you meet with HR, be firm about getting this resolved quickly. Ask them to show you their system's tax calculation screen and request that the correction be processed on your immediate next paycheck, not "sometime in the coming weeks." This is their error and you shouldn't have to wait to get your own money back. Don't let them dismiss this as normal tax adjustments - the math clearly shows something is wrong. This type of payroll glitch happens more often than you'd think, especially during tax year transitions, and it's usually straightforward to fix once properly identified. Stay persistent and you'll get this resolved!

That's a really interesting observation about the EITC connection! I've been wondering about the patterns myself. The IRS does tend to scrutinize EITC claims more heavily since it's one of the most commonly exploited credits for fraudulent refunds. It makes sense they'd proactively add identity theft protection to accounts that claim it. I claimed EITC this year too and got my CP01E about 3 weeks after filing. My tax preparer mentioned that the IRS has been ramping up their fraud prevention efforts, especially around refundable credits. So while it might feel targeted, it's probably just them being extra cautious with returns that historically have higher fraud rates. The good news is that legitimate EITC claims shouldn't be delayed by the CP01E - it's just an extra layer of account protection moving forward.

I wanted to follow up on your original question about the CP01E notice and your refund timing. Based on all the helpful responses here, it sounds like you can breathe easy! The notice is actually the IRS looking out for you, not delaying your refund. Since you filed on February 12th through TaxSlayer, you should still expect your refund within the normal 21-day processing window (assuming no other issues with your return). The CP01E is completely separate from refund processing - it's just adding a protective flag to your account for future filings. Your switch to online filing definitely didn't trigger this notice. The IRS uses much more complex data analysis to identify potential identity theft risks, and honestly, online filing is often more secure than paper filing anyway. I'd recommend taking up the suggestion about getting an IP PIN for next year's filing - it's free extra security that you can set up right now through your IRS online account. And definitely keep monitoring your credit reports as suggested, but don't stress about the refund timing. You should see that money for your car repairs right on schedule!

Don't forget that the IRA contribution limits for 2025 are $7,000 for traditional and Roth IRAs if you're under 50, and $8,000 if you're 50 or older. Make sure you're not exceeding these limits when reporting! Also, there's income limits for deducting traditional IRA contributions if you or your spouse have a retirement plan at work. These can affect whether your contributions actually reduce your MAGI for APTC purposes.

As someone who went through this exact same confusion last year, I want to add one more important point that hasn't been mentioned yet: make sure you're also considering any HSA contributions you made if you have a High Deductible Health Plan through the marketplace. HSA contributions work similarly to traditional IRA contributions in that they reduce your MAGI for APTC purposes. For 2025, you can contribute up to $4,300 for self-only coverage or $8,550 for family coverage (plus an additional $1,000 if you're 55 or older). In TaxSlayer, you'd report HSA contributions under Federal > Deductions > Adjustments > Health Savings Account (HSA). This is separate from where you enter IRA contributions, but both will flow to Schedule 1 and reduce your MAGI. I discovered that combining my traditional IRA contributions with my HSA contributions actually eliminated my APTC repayment entirely and even resulted in a small additional credit. Don't overlook this if you have an HSA-eligible plan!

I've been following this thread as someone who's dealt with S-Corp filing issues before, and I wanted to add something that might help ease some anxiety. The IRS actually has a pretty reasonable approach to first-time late filers, especially when there are legitimate circumstances involved. While missing deadlines is never ideal, they understand that business owners face unexpected challenges - whether it's switching accountants, health issues, or other emergencies. What I found most helpful when I was in a similar situation was getting organized quickly rather than panicking. Make a list of exactly what documents you have, what you're missing, and what your new accountant needs to move forward. This way, when you do meet with them next week, you can hit the ground running instead of spending billable time figuring out the basics. Also, keep detailed notes about the circumstances that led to missing the deadline - the accountant transition, any delays in getting records transferred, etc. Even if it doesn't fully qualify as "reasonable cause" for penalty abatement, having a clear timeline of events can be helpful if you need to communicate with the IRS later. The good news from this thread is that your situation might not be as dire as it initially seemed, especially if your S-Corp doesn't have direct tax liability. Focus on getting everything filed correctly rather than rushing, and take advantage of the resources people have shared here. You're definitely not alone in dealing with this kind of situation!

I wanted to jump in here as someone who's been through a very similar situation with my S-Corp last year. The stress you're feeling is completely understandable, but based on what I learned (and what others have shared in this thread), you may be in better shape than you think. First, definitely check whether your S-Corp actually owes any direct taxes. In my case, since all income passed through to my personal return, the late filing penalties were actually zero despite missing the deadline by several months. That was a huge relief after weeks of anxiety. Second, the resources people have mentioned here are genuinely helpful. I used both the taxr.ai service to understand my penalty situation and Claimyr to actually speak with an IRS agent when I had specific questions. Both saved me significant time and stress compared to trying to navigate everything myself. The key thing I learned is that the IRS is generally reasonable with first-time issues, especially when there are legitimate circumstances like switching accountants. Just make sure to document everything about your situation - the transition timeline, any delays in getting records from your previous accountant, etc. Get your new accountant involved ASAP, but don't rush the filing if it means making errors. A slightly longer delay to file correctly is better than filing quickly with mistakes that could trigger more problems down the road. You've got this! The situation feels overwhelming right now, but there are clear steps to resolve it, and you're definitely not alone in dealing with this type of issue.

I think there's also an important practical consideration that hasn't been fully explored yet - the administrative and compliance costs of different tax systems. While flat taxes seem simpler in theory, the reality is that even with a flat rate, you still need to define what constitutes "income" - do you include capital gains, inheritance, investment returns, business expenses, etc.? These definitional questions create complexity regardless of the rate structure. Progressive systems, despite having multiple brackets, often capture these nuances better and can be designed to close loopholes that disproportionately benefit high earners. Many countries with flat taxes have found they need to add back complexity over time to prevent tax avoidance. From a revenue perspective, progressive taxation also tends to be more stable during economic downturns since it relies more heavily on higher incomes that are less volatile than lower incomes during recessions. That said, I really appreciate how this discussion has highlighted that "fairness" isn't just a mathematical concept - it involves real judgments about economic impact, social values, and practical outcomes. Both systems have legitimate philosophical foundations.

I think one aspect that deserves more attention in this discussion is how progressive taxation can actually enhance economic mobility and opportunity - something that benefits society as a whole. When lower-income individuals keep more of their earnings through lower tax rates, they're more likely to invest in education, start small businesses, or take entrepreneurial risks. This creates a more dynamic economy where talent can rise regardless of starting point. Meanwhile, those at higher income levels often have wealth that generates returns through investments, real estate, and business ownership - income sources that are less dependent on their immediate tax burden. The progressive structure recognizes that a wealthy person's ability to generate future income is less affected by current taxation than someone living paycheck to paycheck. There's also the network effects to consider. Higher earners typically benefit more from stable, educated communities - their businesses need skilled workers, reliable infrastructure, and consumer spending power. Progressive taxation helps maintain these conditions by ensuring public investment in education, infrastructure, and social stability. So while I understand the intuitive appeal of "same percentage = fair," I've come to see progressive taxation as an investment in the economic ecosystem that ultimately benefits everyone, including high earners.