The solo 401k contribution calculation errors would be my last straw. That's a pretty straightforward calculation with clear limits, and getting it wrong multiple years shows either incompetence or carelessness.

These are absolutely red flags, not normal CPA behavior. I've been through tax season with several different CPAs over the years, and what you're describing shows a fundamental lack of attention to your account. The estimated tax payment issue alone should have you looking elsewhere. When you explicitly notify your CPA about a significant revenue increase, recalculating quarterly payments should be automatic - that's Tax Planning 101. The fact that he acknowledged your email but didn't act on it is inexcusable, especially when you're facing an $82k surprise bill. The repeated solo 401k errors are particularly telling because these calculations follow straightforward IRS guidelines. Making the same mistake twice suggests he's not learning from his errors or possibly not dedicating enough time to your file. You're not being unreasonable - you deserve a CPA who is proactive, organized, and responsive to your communications. Start interviewing new candidates now, and make sure to ask them specifically how they handle mid-year revenue changes and client communications. A good CPA should have systems in place to prevent exactly what you're experiencing.

Quick practical tip - when you contact the client, ask them to also provide you with a letter acknowledging the error for your records. I keep a file of these correction letters just in case the IRS ever questions why a reported 1099 didn't show up on our corporate return. Better to have documentation ready than to explain it during an audit!

Thanks everyone for the helpful advice! I just wanted to add that timing matters here too. If your client has already filed the 1099-NEC with the IRS (the deadline was January 31st), they'll need to submit a corrected form showing $0 rather than just voiding it in their system. Also, don't panic if they can't or won't correct it immediately. As long as you're properly reporting your corporate income on Form 1120, the IRS computer matching system will eventually sort it out. The key is having documentation that you attempted to get it corrected - keep copies of your emails or letters to the client requesting the correction. One more tip: if this client regularly pays your corporation significant amounts, it might be worth having a conversation about updating their vendor files to properly classify you as a corporation to prevent this from happening again next year.

Quick question - does anyone know if the tenants themselves could get in trouble for paying rent to someone they know isn't reporting the income? My sister is in a similar situation with her landlord who openly says he doesn't report rental income.

As someone who works in tax compliance, I want to emphasize that reporting suspected tax fraud is actually a civic duty that helps ensure everyone pays their fair share. The fact that this landlord openly admits to not reporting income and keeping things "off the books" makes this a pretty clear-cut case. One thing I'd add to the excellent advice already given - when you file Form 3949-A, be as specific as possible about dates, amounts (if known), and include copies of any evidence like those money order photos the tenants have. The more documented evidence you can provide, the stronger the case will be. Also worth noting that rental income tax evasion often involves other violations too - like not paying proper business taxes, employment taxes if they have maintenance staff, or even local occupancy taxes. The IRS investigation may uncover additional issues beyond just the unreported rental income. Don't feel bad about reporting this - tax evasion hurts everyone by shifting the burden to honest taxpayers and reducing funding for public services we all depend on.

I'm confused about something similar - if I take money from my Roth IRA that I originally contributed (not earnings), do I still have to report it on my taxes even if I know it's not taxable?

The blank Box 2a on your 1099-R is actually a good sign - it likely means TIAA determined the distribution wasn't taxable, which is why they didn't withhold anything this time. However, you absolutely still need to report this on your tax return even if no taxes are owed. Since you mentioned this is from a rollover you did over a year ago, the key question is whether those were pre-tax or after-tax funds that you rolled over. If you rolled over from a traditional 401(k) or IRA to a Roth (a conversion), you would have paid taxes on that conversion at the time. Any distributions from those converted funds would generally be tax-free as long as it's been more than 5 years since the conversion AND you're over 59½. If the rollover was from another Roth account, then the funds maintain their original character and the 5-year clock from your original Roth IRA applies. Make sure to check Box 7 for the distribution code - that will tell you exactly how the IRS expects this to be treated. You'll likely need to file Form 8606 along with your 1040 to properly report this distribution and show why it's not taxable.

One thing to keep in mind - if you and your spouse file jointly but the IRA is only in one name, make sure you're putting the correct SSN on the standalone 5329. I made this mistake and put both our names and SSNs on the form, which caused confusion and delayed processing. For an inherited IRA, you need just the account owner's information.

Just wanted to share my recent experience with this exact situation. We missed an RMD from my wife's inherited IRA in 2023 and discovered it after already filing our return. I was really stressed about the potential $1,800 penalty. We filed the standalone Form 5329 with a reasonable cause letter explaining that we were confused by the new SECURE Act rules and thought we had until age 73 (like regular IRAs) rather than continuing the original owner's RMD schedule. We also mentioned that we immediately took the missed distribution once we realized the error and set up automatic distributions going forward. The IRS completely waived the penalty! The key things that seemed to help were: 1) We took action immediately after discovering the mistake, 2) We showed we put measures in place to prevent it happening again, and 3) We were honest about the confusion without making excuses. The whole process took about 6 months from filing the 5329 to getting the penalty waiver confirmation. Don't lose hope - the IRS really can be reasonable about first-time mistakes if you handle it properly!