Something similar happened to my wife last year. Turned out someone had her SSN and attempted to file a return. The most important thing is to ACT FAST. The longer this goes unresolved, the more complicated it can get. When we called the IRS, they put a special marker on her account and gave us a PIN we need to use for filing taxes going forward. It protects against anyone trying to file with her SSN again. You should ask about this when you talk to them!

I went through something very similar about 6 months ago - that sinking feeling when you see something unexpected in your IRS account is awful! Since you confirmed it's showing up in your official IRS online account, this is definitely legitimate and needs immediate attention. Here's what worked for me: I filed my legitimate return first thing the next morning (even though I was worried about the verification issue), then immediately called the IRS. When I got through, I explained that I had a verification notice in my online account but had never failed to file. The agent was actually really helpful and walked me through the process. In my case, someone had attempted to file a return with my SSN but it got flagged by their fraud detection system before processing. The "verification of non-filing" notice was basically the IRS asking me to confirm I hadn't actually filed yet, which cleared up the confusion. The whole thing took about 2 weeks to resolve, and I did get my refund (just delayed). The agent also set me up with an IP PIN for future protection. Don't let the stress eat you up - this is more common than you'd think and the IRS has good procedures for handling it!

Form 3176C is basically the IRS saying "hold up, we need to double-check some stuff before we send your refund." It's not necessarily bad news - just means they want to verify income, dependents, or other info on your return. The waiting sucks but it's pretty routine. Just respond quickly with whatever docs they're asking for and you should be good to go!

I went through this exact same thing last year with Form 3176C! The worst part is definitely the waiting, but here's what helped me: respond ASAP with all the requested documents, send everything certified mail so you have proof they received it, and don't panic if you don't hear back right away. The IRS moves slow but they will eventually process it. My refund came through after about 10 weeks once I sent in the verification docs. Hang in there!

Something nobody has mentioned yet - if you're selling products you make yourself, make sure you understand your state's rules about operating a business from a residential apartment. Some landlords and local zoning laws might have restrictions, especially if you're working with chemicals or having customers come to your place. I learned this the hard way when my landlord found out about my small bakery operation!

Great advice from everyone! I just wanted to add one more thing that helped me when I started claiming my home office deduction - keep a simple log or calendar showing what business activities you do in that space. Since you mentioned you use the bedroom for making products, packaging orders, and handling business admin, documenting this regular use can be really helpful if you're ever questioned. I keep a basic monthly log showing "product creation," "order fulfillment," "bookkeeping," etc. for the days I work in my home office. Also, since you're using H&R Block software, they should have good guidance on Form 8829 if you decide to go with the actual expense method rather than the simplified method. The software usually walks you through the calculations pretty well. Just make sure you're consistent with whatever percentage you choose - if you say 25% for rent, use 25% for utilities, internet, etc.

Quick question- what about state taxes? Everyone's focusing on federal capital gains, but many states also tax capital gains, often at your ordinary income tax rate. Make sure to account for this in your planning!!

One important detail to double-check - make sure you're using the correct date-of-death valuation. Since you mentioned the FMV was "approximately $245,000," you'll want to have solid documentation for this stepped-up basis amount. The IRS may want to see a formal appraisal from around the date of death, especially since your sale price was significantly higher at $310,000. If you don't have a formal appraisal from the date of death, you might want to get a retrospective appraisal or use comparable sales data from that time period. The difference between using $245K vs. a potentially lower undocumented value could significantly impact your taxable gain calculation. Also, don't forget that any estate taxes paid on the property can be added to your basis under IRC Section 1014(a), though this typically only applies to larger estates that exceeded the federal exemption threshold.

I went through this exact situation last month! The 3176C letter definitely looks scary but it's really just a standard identity verification. I'd recommend trying the online route first at IDverify.irs.gov - it's way faster than calling and you don't have to deal with hold times. The whole process took me maybe 15 minutes once I had my documents together. You'll need your Social Security card, driver's license, and your prior year tax return. After I completed verification, it took about 8 weeks to get my refund, which honestly wasn't as bad as I expected based on some of the horror stories I'd read online. The key is just getting the verification done ASAP - don't put it off!

I just went through this verification process a couple weeks ago and wanted to share my experience! The 3176C form definitely caught me off guard at first, but it's actually pretty manageable. I chose to do the phone verification route since I wasn't sure about uploading documents online. The wait time was about 45 minutes (called around 10am on a Tuesday), but once I got through, the agent was really helpful and walked me through everything step by step. They asked for basic info like my SSN, filing status, and a few numbers from my previous year's return. The whole call took maybe 20 minutes once connected. Now I'm in the waiting phase - they said 6-9 weeks typically but could be faster. Just wanted to let you know there's light at the end of the tunnel! The verification itself isn't as complicated as the letter makes it seem.