Code 971 just means they generated and sent you some kind of notice - could be routine like identity verification, a math error correction, or requesting additional documentation. The key is to look at the date and any other transaction codes around the same time. Don't panic until you actually receive and read the notice! Most of the time it's something simple that can be resolved quickly.

Had the same thing happen to me a few months back and it turned out to be nothing major - just needed to verify some info on my return. The 971 code itself is pretty generic, but like others mentioned, definitely check what other codes show up around the same date. That'll give you a better idea of what to expect. The waiting game sucks but try not to stress too much until you actually get the letter!

I actually went through this exact scenario with my daughter's accounts last year! Since the amounts are relatively small ($300-400), you honestly don't need any special documentation to report it on your return. The IRS isn't going to question a few hundred dollars in interest income - they're looking for much larger discrepancies. That said, if you want to be extra cautious, you could keep a simple note in your tax files explaining that the accounts are joint with your children but the funds belong to them. Something like "Interest reported from joint savings accounts - funds belong to adult children per informal family arrangement." I kept it simple and just reported the interest normally on Schedule B. Never had any issues, and my tax preparer said this is actually pretty common with parents helping adult kids get better interest rates. The key is being consistent - whatever approach you choose, stick with it each year. If the amounts were in the thousands, I'd probably go through the effort of switching the primary SSN or removing myself from the accounts. But for a few hundred bucks, the administrative hassle isn't worth it in my opinion.

I've been following this thread and wanted to add my perspective as someone who works in banking compliance. The advice here is generally solid, but I'd emphasize one important point: whatever you decide to do, make sure you're consistent year over year. If you decide to keep reporting the interest on your return this year, that's perfectly fine for the amounts you're talking about ($300-400). The IRS sees joint account situations like this all the time, especially with parents helping adult children access better rates. However, if you're planning to have these accounts long-term, I'd seriously consider removing yourself entirely (as several others suggested). Not only does it clean up the tax reporting, but it also helps your kids build their own banking relationships and credit history. At 23 and 24, they're well past the age where they need a parent on their accounts. One practical tip: if you do decide to remove yourself, wait until after you receive this year's 1099-INT forms so you can properly report 2024's interest. Then make the change early in 2025 so next year's reporting is clean and simple. The bottom line is that any of the approaches mentioned here are legitimate - just pick one that makes sense for your family's situation and stick with it!

I just want to echo what everyone else is saying here - you're in a much better position than you think! As someone who recently went through a similar Roth IRA withdrawal, I can confirm that the process is pretty straightforward once you understand the rules. The key takeaway from all these great responses is that Roth IRA contributions can always be withdrawn penalty-free and tax-free, regardless of your age or how long the account has been open. The 10% penalty everyone worries about only applies to earnings/growth on those contributions. Since your $2000 has been sitting uninvested for 6 years, you're likely looking at withdrawing pure contributions with minimal to no earnings. When you call E-trade, ask them for your "contribution basis" - this is the magic number that tells you exactly how much you can withdraw penalty-free. One last tip: don't be intimidated by their withdrawal interface asking for a "reason." As someone mentioned, just select the early distribution option and let the IRS forms sort it out later. The important thing is getting access to your money when you need it, especially since it appears you can do so without any penalties. Good luck!

I'm really glad I found this thread! I've been putting off dealing with a similar situation with my own Roth IRA because I was terrified of penalties, but reading everyone's experiences here has been incredibly educational. The consistent advice about asking for your "contribution basis" versus current account value seems to be the golden rule for figuring out penalty-free withdrawals. It's amazing how many people were in nearly identical situations - money sitting uninvested for years that can be withdrawn without penalties. @Ethan Clark, based on all the great advice here, it sounds like you're likely going to be able to access most or all of your $2000 without any penalties since it's been sitting uninvested. The fact that multiple people who work in finance and have personal experience are all saying the same thing should give you confidence to move forward. Thanks to everyone who shared their real experiences rather than just speculation - this is exactly the kind of practical advice that makes this community so valuable!

I'm dealing with the exact same situation right now! My former employer incorrectly reported my state withholdings and I've been waiting 9 weeks for the "IRS to process" the correction. After reading through all these responses, I realize I've been doing this completely wrong - I should have been demanding my W-2c copies from my employer weeks ago instead of just sitting around waiting! It's so frustrating how employers make this process sound way more complicated than it actually is. The whole "waiting for IRS approval" thing seems to be a common misconception (or excuse) that keeps us in limbo unnecessarily. I'm calling my former employer first thing tomorrow to specifically request my copies of the W-2c they submitted. Based on everyone's experiences here, it sounds like once I have those corrected forms in hand, I can file my taxes immediately without waiting for the IRS processing to complete. Thanks to everyone who shared their timelines and experiences - the 8-12 week processing window seems to be the unfortunate norm, but at least now I know how to actually move forward instead of just waiting indefinitely. This thread has been incredibly helpful for understanding what should be a straightforward process!

I'm also going through a W-2 correction situation right now and this thread has been incredibly helpful! My employer incorrectly reported my bonus income allocation and I've been waiting about 8 weeks. Like so many others here, I was getting the "we need to wait for IRS processing" runaround from HR. Reading everyone's experiences has been a real eye-opener - I had no idea that employers are legally required to provide W-2c copies directly to employees. I've been sitting here waiting for some kind of official IRS confirmation that apparently doesn't even exist in the way I thought it did. The consistent timeline of 8-12 weeks that everyone is reporting is actually reassuring, even though it feels like forever when you're in the middle of it. But the key takeaway seems to be that we don't need to wait for the full IRS processing to complete before we can file our taxes - we just need those W-2c copies from our employers. I'm definitely calling my HR department tomorrow morning to specifically request my W-2c copies. Thanks to everyone for sharing your experiences and breaking down how this process actually works. It's frustrating that something this straightforward gets made so unnecessarily complicated by employers who either don't understand the process themselves or just aren't being helpful about explaining it clearly!

I experienced this exact situation last year. Here's what I discovered: • The IRS often splits refunds when certain credits are claimed (EITC, CTC, etc.) • They process the "base refund" first (standard deduction, etc.) • The "credit portion" comes later after additional verification • This is actually a fraud prevention measure • You should receive a letter explaining the situation In my case, I received exactly 50% of my expected refund initially. The second half arrived 24 days later. I never received any notification that this would happen, which was frustrating. The only way I knew what was happening was by checking my tax transcript online, which showed codes indicating part of my refund was still processing.

I'm sorry to hear you're going through this stress - it's especially tough when you're on a fixed income and counting on that money. From what I've seen in similar situations, the IRS frequently splits refunds when certain refundable credits are involved, particularly the Earned Income Tax Credit or Child Tax Credit. They'll process your basic refund first, then hold the credit portion for additional verification as a fraud prevention measure. This can happen even if everything on your return is completely correct. I'd recommend checking your IRS account transcript online if you can - it will show specific transaction codes that explain what's happening. Look for codes like TC 570 (refund hold) or TC 971 (notice issued). You should receive a letter in the mail within the next 2-3 weeks explaining the situation, and the remaining portion typically arrives 3-6 weeks after the first payment. I know the wait is frustrating, but this seems to be becoming more common as the IRS increases verification procedures.