I completely understand your anxiety about seeing code 420 on your transcript - that "Examination of tax return" language would make anyone nervous! But based on what you've described, this actually appears to be really good news. The combination of code 420 with a $0.00 amount is what tax professionals call a "no change audit" or correspondence examination. This typically means the IRS flagged your return for automated review (very common with higher-income returns like yours showing $183,265), cross-checked your reported figures against their records from employers and financial institutions, and found everything matched perfectly. The timeline also supports this - you filed in March 2023, the examination code appeared in July 2023, which is a typical processing window for these automated verifications. Since it's now been well over a year without any CP2000 notices or formal audit correspondence, the examination was almost certainly closed with no issues found. For absolute peace of mind, you can call the IRS at 1-800-829-1040 to confirm the examination status, or check your online IRS account for any messages. You might also look for code 421 on more recent transcripts, which would officially indicate the examination was closed with no changes. Your mortgage application should proceed without any problems - this looks like routine processing that's already been resolved in your favor!

I went through this exact same situation with my 2019 return! Code 420 appeared on my transcript and I was absolutely terrified I was being audited. Like you, I had a higher income return and made a large payment, which apparently triggered their automated review system. The $0.00 amount next to your code 420 is actually the best possible outcome - it means they completed their examination and found no adjustments were needed. If they had discovered issues, you'd see a dollar amount reflecting additional taxes or penalties owed. What really helped ease my mind was calling the IRS directly at 1-800-829-1040. The agent confirmed that my examination had been closed with no changes and explained that these automated reviews are incredibly common for returns with significant income like ours. She said the IRS cross-references reported income against W-2s, 1099s, and other third-party documents they receive. Since it's been over a year since your code appeared and you haven't received any CP2000 or formal audit notices, you're almost certainly in the clear. The IRS is legally required to notify you if they find discrepancies or need additional information. For your mortgage application, this shouldn't be an issue at all - lenders see these examination codes regularly and understand they're often just routine verifications that result in no changes.

Another thing to check - if you've recently moved, make sure your address matches what the IRS has on file. Sometimes address mismatches can trigger name/SSN verification issues too. You can verify your address with the IRS by calling their automated line at 1-800-829-1040. Also, if you're using tax software, try filing again with your full legal name exactly as it appears on your SS card - character for character, including any punctuation.

Had this exact same issue last month! Turned out I had been using "Jr." on my tax return but my actual SS card doesn't have the suffix on it. The IRS system is super picky about matching character-for-character. Also worth noting - if you've been married/divorced recently and haven't updated your name with SSA yet, you'll need to do that first and wait about 2 weeks before the IRS system updates. You can also try calling the IRS Practitioner Priority Service at 1-866-860-4259 to verify what name they have on file for your SSN.

The FreeTaxUSA interface can be really confusing with QBI. I've found that TurboTax actually explains the QBI rules better and walks you through the calculations, but it's more expensive. H&R Block's software is somewhere in the middle.

This is exactly the kind of situation that trips up a lot of people! You're handling it correctly - when freelance work is substantially the same as what you did as an employee for the same company, it doesn't qualify for QBI. The IRS created this rule specifically to prevent people from just switching to contractor status to claim the deduction while doing identical work. One thing to keep in mind for future planning: if your wife continues freelancing, she might want to diversify her client base. Income from different clients (not former employers) doing similar work would qualify for QBI. Also, if she can expand her services to include substantially different work for her former employer, that portion might qualify. Don't feel bad about "losing" the QBI deduction - you're following the rules correctly, and she can still benefit from legitimate business expense deductions on Schedule C. It's better to be compliant than to incorrectly claim QBI and face potential penalties later.

Anyone know if TaxAct has a way to see if it was actually transmitted to the IRS beyond just the email? I'm in the same boat, filed 2 weeks ago and still pending!

I went through this exact same worry last month! Filed with TaxAct and it stayed "pending" for almost 2 weeks. What really helped calm my nerves was understanding that "pending" doesn't mean there's a problem - it just means the IRS hasn't finished processing yet. The key thing to remember is that your filing date is locked in when you hit submit in TaxAct, not when the IRS finishes processing. So even if it's still pending after May 17th, you're not late as long as you submitted before the deadline. I'd suggest checking the IRS "Where's My Refund" tool - it often shows acceptance before the tax software updates. And definitely don't file a paper copy unless you get an actual rejection notice. Duplicate filings can create way more headaches than just waiting for the electronic processing to finish. Hang in there - the waiting is the worst part, but TaxAct is reliable and your return is almost certainly fine!

Got through this exact situation. Filed February 3rd. Return stuck for verification. Former employer never sent W-2 info to SSA. Called IRS April 12th. Submitted Form 4852 with final paystub. Refund received May 9th. Total 95 days. Worth the wait.

Based on my experience helping clients through similar situations, I'd recommend taking a proactive approach while you wait. First, gather all supporting documentation - final paystubs, direct deposit records, offer letter, anything that shows the wage amounts on your W-2 are accurate. This will be crucial if the IRS needs additional verification. Second, consider preparing Form 4852 (Substitute for Form W-2) as a backup plan, though don't file it yet since you have the actual W-2. The IRS often resolves these cases faster when they can see comprehensive documentation that supports the reported wages. Also, keep calling periodically (every 2-3 weeks) to check status - sometimes cases move through the system faster than the quoted timeframes, especially if the employer eventually does submit their data. The 120-day timeline is worst-case scenario, not typical resolution time.