psst... call your local tax advocate. they can tell you exactly wuts happening

Been dealing with this exact same issue! My transcript shows 846 code but WMR is still stuck on "processing" - it's so frustrating when you need that money ASAP. From what I've learned lurking here, if your transcript doesn't show "DPC" next to the 846 code, you're probably getting a paper check. Also check if there's any freeze codes (like 971 or 570) that might indicate why they switched from DD to check. The IRS systems are definitely not synced up properly between transcript and WMR updates 🙄

Just throwing this out there - I made the mistake of NOT including Form 5329 with my tax return in a similar situation (had already mailed it separately). Ended up getting a confusing notice from the IRS 6 months later suggesting I hadn't requested the waiver at all! Had to call and explain everything all over again. Better to include all relevant forms with your tax return, even if redundant. Makes your return complete and consistent. TurboTax is actually doing you a favor by generating it correctly!

Based on all the discussion here, I'm convinced that including the Form 5329 with your tax return is the right move, even though you already submitted one separately. The consistency between both forms (showing the missed RMD amount and requesting the penalty waiver) actually strengthens your case. What really helped me understand this was seeing how other people handled similar situations. The key seems to be that the IRS systems are designed to handle these types of duplicate submissions, and having the form included with your complete tax return creates a more comprehensive record. Since TurboTax is generating the form correctly with the proper notation (missed RMD amount to the side of line 54 and "0" on line 54), I'd go ahead and include it. The worst case scenario is redundancy, which is much better than having an incomplete return that might trigger confusing notices later. Your situation with the December payment not clearing until January is a classic example of reasonable cause, so documenting it consistently across both submissions should work in your favor for the penalty waiver.

One thing nobody's mentioned yet - if you file for an extension and pay what you think you'll owe, you'll avoid the late filing penalty (which is much higher than the late payment penalty). The late filing penalty is 5% of unpaid taxes for each month your return is late, while the late payment penalty is just 0.5% per month.

Your plan is actually quite sound! As someone who's been through similar complexity with multiple 1099s and investment income, I'd suggest one additional consideration: make sure you're calculating your estimated payments correctly if you switch from accrual to cash accounting mid-year. The accounting method change can affect not just your current year taxes, but also create a Section 481(a) adjustment that might spread over multiple years. This could impact your estimated payment calculations for the rest of 2024. Also, regarding those K-1s - many partnerships and REITs routinely file extensions themselves, so don't be surprised if some don't arrive until September. Having that extension in place gives you flexibility to incorporate them into a superseding return rather than dealing with multiple amendments. One tip: keep detailed records of all your estimated payment calculations and the reasoning behind them. If you do face any underpayment penalties later, having documentation that shows you made reasonable estimates based on available information can help if you need to request penalty relief. The superseding return approach is definitely the way to go in your situation. Just make sure to file it before your extended deadline to maintain that advantage over an amended return.

Has anyone actually gone through the process of amending a return for this specific issue? I'm in a similar situation but wondering if the hassle of amending is worth it. How long did it take to get your refund for the overpaid NIIT?

I went through this exact same situation a couple years ago! My tax preparer had been classifying my S-Corp income as passive for THREE years before I caught it. Like you, I'm the sole owner-employee doing all the work - there was nothing passive about it. The material participation tests that Connor mentioned are key here. Since you're the only employee, you almost certainly qualify under multiple tests, especially the "substantially all the work" test (#2) and likely the 500+ hours test (#1) as well. I ended up filing amended returns for all three years I was eligible to amend (you have 3 years from the original filing date). The total NIIT refund was substantial - over $12,000 combined. Each amended return took about 4-5 months to process, but it was absolutely worth it. One tip: when you meet with your EA about this, bring documentation showing your hours worked and level of involvement in the business. Even though it should be obvious that you materially participate, having records helps support the classification change. Also, make sure they understand this affects both your Schedule E AND your Form 8960 calculation. Don't let them brush this off as "not important" - the NIIT savings alone make it worth correcting, and you want to make sure it's done right going forward.

I'm going through the exact same thing right now! Second year in a row of ID verification and it's been driving me crazy wondering if this is just my life now. Reading through all these responses has been so reassuring though - sounds like most people eventually get out of this cycle. What really stands out to me is how many different factors can trigger this. I've been racking my brain trying to figure out what changed in my situation, but now I'm realizing it could be anything from my zip code to the specific combination of credits I claim. The proactive ID.me verification tip from @Chloe Anderson sounds brilliant - I'm definitely going to set that up before I file next year. And @Omar Zaki's strategy about calling to get a verification history note added is something I never would have thought of but makes total sense. It's frustrating that the IRS is so opaque about their selection process, but at least knowing that other people have made it through gives me hope. Thanks everyone for sharing your experiences - this thread has been more helpful than anything I could find on the official IRS website!

This thread has been incredibly enlightening! I'm currently dealing with my first ID verification requirement and was terrified this would become a permanent thing. Reading everyone's experiences - especially @Omar Zaki's success story and @Chloe Anderson's proactive ID.me strategy - gives me so much hope. What strikes me most is how the IRS system seems to create these feedback loops that trap legitimate taxpayers, but there ARE ways to break out of the cycle. The combination of proactive verification through ID.me, keeping detailed records, and potentially calling to add verification history notes to your account sounds like a solid game plan. I'm definitely going to set up my ID.me account before filing next year and document everything about this current verification process. It's frustrating that we have to become tax strategy experts just to file our returns, but at least now I feel armed with actual actionable steps instead of just hoping for the best. Thanks to everyone who shared their experiences - this community knowledge is worth its weight in gold when dealing with these opaque IRS processes! 🙏