I appreciate everyone sharing their experiences and insights on this topic. As someone new to this community, I've been following along and learning a lot from the discussion. From what I've gathered, it seems like there are really two separate issues to consider: the tax implications and the airline policy implications. On the tax side, most experts seem to agree that the $900 you receive would technically be reportable income, even though enforcement is practically non-existent for these small family transactions. What struck me most was the airline policy angle that Ellie brought up - I had no idea that selling miles could result in account closure. That seems like a much more immediate risk than any tax issues, since airlines apparently do monitor for suspicious patterns. For someone in Marcus's situation, it sounds like the safest approach might be to simply book the ticket directly for his brother using the miles, then let his brother reimburse him however he wants to handle it personally. That way there's no formal "sale" of miles from the airline's perspective, and the tax question becomes more of a gray area around informal family assistance. Thanks to everyone who shared their real experiences - it's much more helpful than trying to parse through conflicting information online!

This has been such a helpful discussion! As someone who's accumulated a decent amount of miles over the years and has family members who could benefit from using them, I never realized how many angles there were to consider. The consensus seems pretty clear: while the $900 should technically be reported as income for tax purposes, the bigger immediate concern is violating your airline's terms of service. I really appreciate Ellie's insider perspective on how airlines actually monitor these things - it sounds like keeping it within family and low-key is key. One thing I'm curious about that hasn't been mentioned much: what about the state tax implications? I know some states have different rules around income reporting. Would this $900 need to be reported on state returns too, or do most states just follow the federal treatment? Also, for future reference, does anyone know if the tax treatment would be different if you were transferring points from a hotel loyalty program versus airline miles? Or do the same general principles apply across all loyalty programs? Thanks again to everyone who shared their real-world experiences - this kind of practical advice is invaluable!

Thanks everyone for the helpful responses! I was really hoping I could just wait until next year but it sounds like amending is definitely the way to go. @Daniela Rossi your explanation about the IRS matching system makes total sense - I hadn't thought about the fact that they already have copies of those 1099s. I'm going to wait for my refund like my tax software suggested, then file the amendment. Better to deal with this now than get hit with a surprise letter later! The penalty amounts @Samantha Johnson shared aren't as scary as I imagined, but still not something I want to deal with if I can avoid it. Really appreciate this community - was stressing about this for days and now I have a clear plan forward.

As someone who just joined this community after finding myself in almost the exact same situation, I wanted to thank everyone for this incredibly helpful thread! I received a late 1099-NEC for some consulting work I completely forgot about, and I was panicking about what to do. Reading through all these responses has been such a relief. The explanation about the IRS matching system really opened my eyes - I had no idea they automatically receive copies of all 1099s and cross-reference them with our returns. That definitely makes waiting until next year seem like a terrible idea! I'm also going to wait for my refund before filing the amendment, just like the tax software recommended. It's reassuring to hear from people who've actually been through this process that it's not as scary as it seems. The penalty amounts shared here are definitely motivation to get this handled properly rather than hoping it goes unnoticed. This community is amazing - I was losing sleep over this for the past week and now I have a clear path forward. Thanks again everyone!

The 8879 confused me too! My tax guy said it's like giving permission for him to "sign" the 1040 electronically on my behalf. Basically the 8879 form is saying "I reviewed this return, it's correct, and I authorize you to submit it electronically with my electronic signature." In the olden days when everyone mailed paper returns, you'd sign the 1040 directly. Now with e-filing being so common, the 8879 replaces that physical signature step.

Thank you so much for asking this question! I was literally in the exact same boat last month and was stressing about it too. It's totally normal to be confused about this - the whole e-filing process isn't super intuitive when you're new to it. What everyone else said is spot on: the Form 8879 IS your signature for e-filed returns. Think of it this way - when you sign the 8879, you're basically telling your tax preparer "Yes, I've reviewed my return, everything looks correct, and I authorize you to submit this electronically on my behalf." The IRS accepts this as equivalent to you physically signing the 1040. The signature line you see on the actual 1040 form is only used for paper returns that get mailed in. Since your preparer is e-filing, that line stays blank and the 8879 takes its place. You're definitely not missing anything or doing anything wrong! One tip: make sure you actually review your return carefully before signing the 8879, since that signature confirms you've looked everything over and it's accurate. But sounds like you're already being thoughtful about the process, so you should be all set!

This is exactly what I needed to hear! I just got my 5071c letter yesterday and was completely panicking after reading so many horror stories online about people waiting months for their refunds. I filed on January 20th and was expecting my refund by February 10th, so when it didn't show up I was worried something was wrong. The letter arrived yesterday (February 17th) and I'm planning to call the verification line tomorrow morning. Your timeline gives me so much hope - only 8 days after verification is amazing! I was already mentally preparing myself for the 9-week wait and rearranging my budget accordingly. Quick question for you - did you have to provide any specific documentation during the verification call beyond what was listed in the letter? I want to make sure I have everything ready so I don't have to call back. Thanks for sharing your positive experience! It's refreshing to see a success story in this stressful situation. 🙏

This gives me so much hope! I received my 5071c letter three days ago and have been absolutely dreading the verification process after reading nightmare stories online. Seeing that you got your refund in just 8 days instead of 9 weeks is incredible. I filed on January 22nd and my expected refund date was February 12th, so I'm in a very similar timeline to yours. I've been putting off making the verification call because I was so intimidated by the process, but your success story is the motivation I needed to just get it done. Quick question - when you called, did you use the phone number on the letter or did you find a different IRS number that worked better? I've heard mixed things about which number actually gets you through to the right department. Also, did the "Where's My Refund" tool update right away with the new deposit date, or did it take a few days to show the updated timeline? I've been checking it obsessively and it's still just showing the generic "being processed" message. Thank you so much for sharing this positive experience - it's exactly what those of us dealing with this stressful situation need to hear! 🙏

This is an incredibly frustrating situation that unfortunately affects more ERC recipients than most people realize. Based on your description, it sounds like there was likely a processing error where your EIN or business information got cross-referenced with another company's details in the Treasury payment system. Here's what I'd recommend doing immediately: 1. File a complaint with the Treasury Inspector General for Tax Administration (TIGTA) at tigta.gov. They handle cases involving potential fraud or systemic errors in tax processing. Your situation - where checks with your payment amounts were cashed by a completely different business - suggests either a processing error or potential fraud that TIGTA needs to investigate. 2. Document everything meticulously. Create a timeline showing when you filed for ERC, when payments should have been issued, when you filed Form 3911, and when you received the Bureau's response. Include copies of all correspondence and the fraudulent checks they sent you. 3. Consider filing a police report for check fraud. Even though these are government checks, someone cashing checks that weren't meant for them could constitute fraud, and having a police report number can help when dealing with government agencies. 4. Contact your congressional representative's office. They have direct lines to both the IRS and Bureau of the Fiscal Service that can often resolve cases that get stuck in normal channels. Bring all your documentation and explain that you're caught between two agencies that won't take responsibility. Don't give up - this kind of error is resolvable, but it requires persistence and the right approach. The fact that the amounts match your expected ERC payments but the business details are completely wrong strongly suggests a systematic processing error rather than a simple mix-up.

I went through almost the exact same nightmare with my ERC payments last year. What finally worked for me was getting everything escalated through the Treasury's Office of Inspector General (OIG), not just TIGTA. While TIGTA handles IRS issues, the Treasury OIG specifically deals with problems at the Bureau of the Fiscal Service. The key breakthrough came when I realized this wasn't just my problem - there was apparently a batch processing error that affected multiple businesses in early 2024. The Treasury OIG was already investigating similar cases and was able to fast-track my resolution once they saw the pattern. Here's what made the difference: I submitted a detailed complaint to Treasury OIG showing that the cashed checks had completely different business information but identical dollar amounts to my ERC claim. They immediately recognized this as part of their ongoing investigation into processing errors. Within 6 weeks of filing with Treasury OIG, I had replacement checks issued. The investigator explained that there was a data mapping error in their system that caused some ERC payments to be issued with correct amounts but wrong payee information from a different batch of applications. Don't just focus on TIGTA - make sure you also file with Treasury OIG since they have direct oversight over the Bureau of the Fiscal Service. The combination of both agencies investigating really seems to move things along much faster.