I'm dealing with almost this exact situation - sold my small construction business last December and the new owners have been completely unresponsive about their obligations, including filing Form 8822-B. I've been getting IRS notices for their quarterly employment taxes and it's been incredibly stressful. What's been most helpful from reading through this entire thread is seeing how many people have successfully resolved this through direct communication with the IRS, even when the new owners won't cooperate. The consistent message seems to be that comprehensive documentation can solve this problem even without the 8822-B being properly filed. I'm planning to follow the approach that @StarSurfer and others outlined - sending a certified mail package with my Asset Purchase Agreement, final tax returns, state transfer documentation, and a detailed cover letter. The key insight from @GalacticGuardian about specifically requesting that future correspondence be redirected to the new owners' address is really smart. One additional thing I learned from my tax preparer: if you're still getting notices after sending your documentation package, you can reference the certified mail tracking number and date in follow-up calls to the IRS. This helps them locate your submission in their system and shows you've been proactive about resolving the issue. @Giovanni Martello - have you had any success yet with getting this resolved? Your original post really captured the anxiety I've been feeling about this whole situation. It's reassuring to know we're not alone in dealing with irresponsible buyers who don't handle their post-sale obligations properly.

I'm going through this exact situation right now and can really relate to the stress and anxiety you're experiencing. I sold my small accounting practice in November and the buyers have been completely unresponsive about filing Form 8822-B. I've been getting IRS notices for their tax obligations and it's been keeping me up at night. After reading through all the responses here, I'm feeling much more confident about resolving this. The key takeaway seems to be that you don't need to wait for the new owners to cooperate - you can take direct action with the IRS by providing comprehensive documentation of the sale. I'm putting together my documentation package based on what others have shared: my Asset Purchase Agreement with closing date highlighted, final tax returns showing the end of my ownership period, state registration transfer documents, and a detailed cover letter explaining the situation. The advice about requesting that future correspondence be redirected to the new owners' address is particularly helpful. One thing I learned from my CPA is to also include a statement in your cover letter that you're not trying to file Form 8822-B on behalf of the new owners (since you can't), but rather providing evidence that you're no longer the responsible party as of the sale date. This helps clarify your position with the IRS. The most reassuring thing from reading everyone's experiences is that this is a common problem with established solutions. The IRS deals with business ownership transfers regularly, and they have procedures to handle situations where the proper forms weren't filed by the new owners.

This is such a common question for remote workers! I went through the same confusion when I first started working from home full-time. One thing I'd add to what others have mentioned - even though you can't deduct internet as a W-2 employee at the federal level, some states still allow certain unreimbursed employee expenses. It's worth checking your specific state's tax rules since they can differ significantly from federal guidelines. Also, definitely document your work-from-home setup and expenses even if you can't deduct them right now. The Tax Cuts and Jobs Act provisions expire in 2025, so there's a chance the rules could change for future tax years. Having good records ready could be helpful if the deduction becomes available again. And like others said, definitely explore reimbursement options with your employer first - that's tax-free money in your pocket versus a deduction that reduces your taxable income.

This thread has been really helpful! I'm also 100% remote and had no idea about the Tax Cuts and Jobs Act eliminating those deductions for W-2 employees. One question I haven't seen addressed - what about if you have a dedicated business line? I actually pay for two internet connections at my house: our regular family internet and a separate business-grade connection that I use exclusively for work calls and video conferences (my company requires high reliability for client meetings). Would that change anything about deductibility, or is it still the same rule regardless of how the internet is used? Also curious if anyone knows whether the "exclusively for business" rule applies differently to internet versus other home office expenses? Like I know with home office space you need exclusive business use, but internet seems like it would naturally be harder to separate that way.

This is definitely frustrating! Based on what you've described and the timing with your POS system update, I'd strongly recommend getting a detailed breakdown from payroll ASAP. Here's what I'd do in your situation: 1. **Compare paystubs line by line** - Look at your last normal paycheck versus these $0 ones. Check if federal withholding, state withholding, FICA, or any other deductions changed dramatically. 2. **Ask specifically about the POS system change** - Since this started around the time they updated systems, ask your manager exactly how tip reporting changed. The new system might be auto-declaring 100% of credit card tips instead of letting you declare a portion. 3. **Verify your W-4 info** - Sometimes system updates reset withholding preferences. Make sure your filing status and allowances are still correct in their system. 4. **Document everything** - Take photos of all paystubs and keep records of conversations with management. If your employer can't give you a clear explanation, consider contacting your state's Department of Labor. You shouldn't have to guess why your pay suddenly disappeared, especially when nothing changed on your end. This sounds like either a system configuration error or incorrect tax calculation that needs to be fixed immediately.

I'd also recommend checking if your employer changed their tip allocation method or if there's an issue with how they're calculating your "allocated tips" versus your actual reported tips. Under IRS regulations, restaurants with more than 10 employees must allocate tips to ensure total reported tips equal at least 8% of gross receipts. If the new POS system is automatically allocating additional tips to you (beyond what you actually received), you'd be taxed on that phantom income even though you never got the money. This is different from the credit card tip reporting issue others mentioned - allocated tips are essentially the IRS forcing restaurants to assign additional tip income to workers when total reported tips fall below the 8% threshold. You'd see this as a separate line item on your paystub, often labeled "allocated tips" or similar. If this is happening, you can file Form 4137 with your tax return to report the actual tips you received versus what was allocated to you. But first, check with payroll to see if tip allocation is now part of their new system and whether that's causing your withholding to spike.

One thing nobody's mentioned is that you should check if you can use the simplified method for home business deductions instead of calculating actual expenses. If the rented room is under 300 sq ft, you might be able to use the $5 per square foot deduction (up to 300 sq ft) which is MUCH easier than tracking all those individual expenses and doing all those calculations. Not sure if it applies perfectly to your situation but worth looking into!

I've been through a similar situation with my duplex in Florida while living in Georgia. One important thing to add that I don't see mentioned yet - make sure you're tracking your "days of personal use" very carefully. The IRS has specific rules about what constitutes personal use vs rental use. If you're keeping part of the house available for family visits, those days when family actually stays there count as personal use days, which can affect your ability to deduct rental losses if you have any. Also, any days you spend there yourself for maintenance or repairs don't count as personal use, but days spent there for vacation or personal reasons do. For the Colorado filing requirement, you'll definitely need to file a nonresident return there since that's where the rental income is generated. Most states have this requirement regardless of where you live. The good news is you can usually claim a credit on your Texas return (though Texas has no state income tax, this would apply if you lived in a state with income tax). Documentation is key - keep a calendar marking rental days, personal use days, and vacant days. This will be crucial for your depreciation calculations and expense allocations.

Just want to add one more thing that might help - make sure to keep detailed records of the entire timeline. Document when you left your employer, when you completed the rollover, when you were notified of the ADP test failure, and when you requested the distribution from your IRA. The IRS sometimes asks for this chronology if there are questions about the tax treatment. Since you're dealing with a corrective distribution after a rollover, having clear documentation will help if you need to explain the situation to a tax professional or during an audit. Also, don't stress too much about the withholding you requested - that was actually smart planning since this distribution will be taxable income. You'll just reconcile any over/under withholding when you file your return.

As a former tax preparer, I can confirm most of what's been said here is accurate. The key point everyone should understand is that ADP test corrections are essentially the IRS forcing highly compensated employees to "give back" some of their 401k contributions to maintain the plan's tax-qualified status. Since you already completed your rollover before the test failure was discovered, you're in a somewhat unusual situation. The distribution you took from your IRA will be treated as a regular IRA distribution for tax purposes, but the underlying reason (ADP correction) means it shouldn't be subject to early withdrawal penalties. One thing I'd recommend - when you get your 1099-R, double-check that the taxable amount calculation is correct. Sometimes there can be errors in how the earnings portion is calculated, especially when the correction happens after a rollover. The $135 NIA you estimated sounds reasonable, but verify it matches what appears on the form. Most importantly, don't try to estimate the 1099-R values for your 2024 return. Wait for the actual form and report it accurately. The IRS matching systems will flag any discrepancies between what you report and what the custodian reports on the 1099-R.