This is a really tough situation, but you're not alone in dealing with this kind of employer misconduct. Based on what you've described, your employer is likely committing payroll tax fraud, which is unfortunately more common in small businesses than people realize. Here's what I'd recommend doing immediately: 1. **Document everything** - Start keeping detailed records of all your pay, hours worked, and any communication with your employer about taxes or withholdings. Even text messages or emails can be valuable evidence. 2. **Request your wage transcript from the IRS** - You can do this online through the IRS "Get Transcript" service. This will show you exactly what (if anything) your employer has reported under your Social Security number. 3. **File Form 4852** - If you discover your employer hasn't been properly reporting, you'll need to file this substitute W-2 form with your tax return. You'll estimate your wages and withholdings as accurately as possible using your own records. The good news is that the IRS typically doesn't penalize employees when employers fail to remit withheld taxes, especially if you can demonstrate that money was actually taken from your paychecks. However, you may initially have to pay the taxes and then work to recover them from your employer. Don't wait until the October deadline is breathing down your neck - start gathering your documentation now and consider reporting your employer to both the IRS and your state's Department of Labor. This protects you and helps prevent them from doing this to other employees.

I went through almost the exact same situation two years ago and it was absolutely terrifying at the time. My employer was withholding taxes but never provided paystubs, and when tax season came around, no W-2. I was panicking about the deadline and potential penalties. Here's what worked for me: I immediately requested my wage and income transcript from the IRS website (it's free and pretty straightforward). Sure enough, my employer had reported ZERO wages for me despite taking taxes out of every paycheck for months. I filed Form 4852 using my bank deposit records and a few text messages where my boss had mentioned my pay rate and tax withholdings. The IRS accepted it without any issues. What really helped was that I also filed a complaint with both the IRS and my state's Department of Labor at the same time. The state labor department moved incredibly fast - they contacted my employer within a week, and suddenly all my "missing" tax documents appeared. Turns out my employer had been pocketing the withheld taxes and hoping employees wouldn't notice or know how to fight back. Don't let this drag on until October. The sooner you act, the better your position will be. The IRS is generally understanding about these situations when you're proactive about reporting them. You've got more options and protection than you might think!

I went through this exact same nightmare last year! That "Action Required" message is so misleading because it makes you think YOU need to do something, but really it just means they're reviewing your return internally. After 8 weeks of checking daily and getting nowhere, I finally got my transcript and used one of those transcript analysis tools (taxr.ai) to figure out what was actually happening - turns out I was under income verification review because of a discrepancy with one of my W-2s. The IRS website makes it seem like they'll send you a letter quickly, but in reality those letters can take 2-3 months to arrive, if they arrive at all. My advice: don't just wait around hoping for a letter. Get your transcript, understand what's happening, and if needed use a callback service to actually talk to someone. The anxiety of not knowing is the worst part!

I'm dealing with this exact same situation right now! Filed in early March and have been getting that same "Action Required" message for over 7 weeks. Like you, I've been checking my mail religiously and haven't received anything from the IRS. It's so frustrating because the message makes it sound like they need something from me, but they haven't told me what! I've been reading through all these comments and it sounds like getting your transcript and understanding what's actually happening is the way to go. The WMR tool is clearly useless - it just gives you the same vague message over and over. I'm going to try accessing my IRS online account to get my transcript and maybe use one of those analysis tools people are mentioning to figure out what type of review I'm under. Has anyone here actually received one of those letters they keep saying they'll send? Starting to think they're just a myth at this point! 😤

I've been through this exact situation and it's absolutely maddening! You're definitely not being unreasonable - when someone commits to a timeline, especially for something as important as taxes, they should honor it or at least communicate realistic changes upfront. What really gets me is that sole proprietorship taxes with organized QuickBooks data aren't typically that complex. An experienced accountant should be able to knock that out fairly quickly once they actually sit down to work on it. The constant deadline pushes suggest they're either overbooked or not prioritizing your file appropriately. My advice would be to have that firm conversation about the September 15th date and make it clear this is the final extension you'll accept. Also definitely ask for a fee reduction - you shouldn't pay full price for all the stress and uncertainty they've caused you. For next year, start interviewing other accountants now while you have time to be selective. Ask them directly about their capacity and how they handle workload during busy periods. A good accountant will give you a realistic timeline from the start rather than overpromising and underdelivering. The extension gives you legal coverage until October 15th, but that doesn't excuse the poor communication and project management. You deserve better service than this!

You're absolutely right to be frustrated! This pattern of constantly moving deadlines is unprofessional, regardless of how busy your accountant is. When you've done everything correctly on your end - organized QuickBooks records, provided all documentation, filed the extension - there's no excuse for such poor project management. The issue isn't that they're taking vacations (everyone deserves time off), but that they're not being honest about realistic timelines from the start. Saying May and delivering in September shows they either don't understand their own capacity or are overpromising to keep clients happy. For a sole proprietorship with organized books, this really shouldn't take months once they actually start working on it. I'd recommend having a direct conversation about the September 15th deadline being firm and non-negotiable. Also, absolutely ask for a fee reduction - you shouldn't pay full price for substandard service that's caused you months of unnecessary stress. Start looking for a new accountant now for next year. Interview them specifically about their workload management and ask for realistic timelines based on your business complexity. A good accountant will give you an honest assessment upfront rather than making promises they can't keep. You're not being unreasonable at all - you deserve professional service that respects your time and keeps commitments.

Slightly off-topic, but since you mentioned carrying forward passive losses for years... don't forget that when you fully dispose of your entire interest in a passive activity, you get to use up all the suspended passive losses from that activity. This doesn't help with your current situation, but something to keep in mind for future planning. So if you have another rental property with suspended passive losses, selling that property would allow you to use all those losses in the year of sale (even against non-passive income).

This is a really common misconception that trips up a lot of real estate investors. The key thing to understand is that the IRS has three buckets of income: active, passive, and portfolio. Even though you're a limited partner (which normally makes your income passive), capital gains from asset sales fall into the portfolio bucket regardless of your participation level. Think of it this way: the partnership's day-to-day rental operations generate passive income for you as a limited partner, but when they sell the underlying asset, that sale generates portfolio income. It's the nature of the income itself, not just your level of participation, that determines the classification. One silver lining: make sure you're maximizing any other passive income you might have. Check if you have any other K-1s with passive income in boxes 1, 2, or 3 that you can use against those carried-forward losses. Also, as others mentioned, look carefully at any depreciation recapture amounts - those might have different treatment rules. It's frustrating, but this rule exists to prevent people from generating easy capital gains just to offset passive losses. The IRS wants to keep these income streams separate for policy reasons.

Has anyone dealt with state tax treatment of these charitable annuity distributions? My federal return was fine but my state (CA) didn't seem to recognize the charitable aspect and taxed the full distribution.

This is a really complex area that trips up a lot of people! I went through something similar last year with my non-qualified annuity. One thing I learned that might help - make sure you understand which portion of your distribution is taxable gain versus return of your basis (the money you originally put in). For non-qualified annuities, only the earnings portion is taxable, not your original contributions. So when you're calculating how much to exclude from taxable income due to the charitable contribution, you need to work with the taxable portion only. Your annuity company should provide documentation showing this breakdown. Also, definitely keep detailed records of the direct payment arrangement with your annuity company. I had to provide a letter from them confirming they made the payment directly to the charity per my instructions. The IRS wants to see that clear paper trail showing you never had constructive receipt of the funds.