I'm dealing with a similar situation right now - living in Canada and just received an IRS notice that's 6 weeks past the response deadline! Reading through all these responses has been really reassuring. One thing I want to add is that when you call the IRS international line, ask them specifically about Form 911 (Request for Taxpayer Advocate Service Assistance). If you're experiencing significant hardship due to the mail delays and can't resolve the issue through normal channels, the Taxpayer Advocate Service can intervene on your behalf. They have special authority to work with international taxpayers facing these kinds of systemic issues. Also, I've found that including a brief timeline in your response letter helps - something like "Notice dated [X], postmarked [Y], received [Z]" makes it crystal clear to whoever reviews your case that this was a mail delay issue, not procrastination on your part. Thanks to everyone who shared their experiences - it's made this whole situation feel much more manageable!

I'm currently facing this exact situation as well - received an IRS notice 5 weeks past their deadline while living in Germany. The stress has been overwhelming, but reading everyone's experiences here is incredibly helpful! One thing I wanted to add that hasn't been mentioned yet: if you're in a country that's part of a tax treaty with the US, you might want to reference that treaty in your response letter. Some treaties have specific provisions about correspondence and reasonable timeframes for international taxpayers. I found this information in IRS Publication 901 (U.S. Tax Treaties), and it gave me additional grounds to explain why the delay was beyond my control. Also, for anyone else dealing with this - I discovered that some international post offices will provide a "Certificate of Posting" retroactively if you can provide them with tracking numbers or other proof. This can serve as additional documentation that the letter was indeed sent much earlier than you received it. The anxiety about missing deadlines when you're overseas is real, but it sounds like the IRS is generally understanding about these situations when you respond promptly and document everything properly. Thanks to everyone who shared their stories - it's made this process feel much less scary!

This thread perfectly captures why I've become so cynical about our political system. The fact that we have clear evidence of companies spending millions to deliberately keep a government service complicated - and our representatives just... let it happen - shows how broken things really are. What's particularly infuriating is that this affects literally everyone. Unlike a lot of political issues where you can argue there are different legitimate perspectives, this is just pure rent-seeking behavior that makes every American's life worse and more expensive. There's no public benefit to the current system - it exists solely to generate profits for a handful of companies. I've been thinking about this since reading everyone's experiences, and it's made me realize how many other areas of government probably work the same way. How many other "complicated" systems are actually just artificially complex because some industry has a financial interest in keeping them that way? The grassroots solutions people are sharing here give me some hope, but it's depressing that we need them at all. We shouldn't have to crowdsource workarounds to deal with basic government services. Still, I'm grateful for everyone sharing these resources - it's probably saved me hundreds of dollars and hours of frustration.

As someone who just discovered this community through a friend's recommendation, I have to say this thread has been absolutely eye-opening. I've been using TurboTax for the past 5 years and just accepted the annual $150+ charge as "the cost of doing taxes," but reading about the deliberate lobbying efforts to keep the system complicated has me genuinely angry. What really gets me is that I work in tech, so I understand how easy it would be to automate most of this process. The fact that other countries have solved this problem decades ago while we're still stuck with this archaic system purely because of corporate interests is infuriating. I'm definitely going to try some of the alternatives mentioned here - especially the taxr.ai tool that several people have vouched for. The idea that I might have been missing legitimate deductions all these years because TurboTax's interview process isn't thorough enough is both frustrating and motivating. Thank you to everyone sharing practical solutions here. It's refreshing to find a community that doesn't just complain about problems but actually helps each other find ways to fight back against unfair systems. Looking forward to contributing more as I learn!

This thread has been incredibly informative! I'm in a similar situation caring for my disabled spouse and receiving HCBS waiver payments that I've been reporting as self-employment income for three years now. One aspect I haven't seen discussed much is the interaction between Notice 2014-7 and Social Security benefits. Since I've been paying self-employment tax on these payments, they've been contributing to my Social Security earnings record. If I exclude them going forward and amend prior returns, will this affect my future Social Security benefits calculation? I'm particularly concerned because as a caregiver, I've had very limited other employment income over the past several years, so these payments have been my primary source of Social Security credits. Has anyone looked into this aspect or gotten guidance from Social Security Administration about how excluded Medicaid waiver payments impact benefit calculations? Also, I'm curious if anyone has experience with how this affects eligibility for other federal programs that use MAGI (Modified Adjusted Gross Income) calculations. Lower reported income from excluding these payments might actually help qualify for things like premium tax credits for health insurance. Would love to hear if anyone has navigated these broader implications beyond just the immediate tax benefits!

This has been such a valuable discussion! I'm also a caregiver receiving Medicaid waiver payments and had no idea about Notice 2014-7 until reading this thread. I've been dutifully reporting everything on Schedule C and paying self-employment tax on about $24,000 annually for the past five years. What strikes me most is how many of us were in the exact same situation - incorrectly paying SE tax on payments that should have been excluded. It really highlights how poorly publicized this notice is, even among tax preparers. I actually asked my previous tax preparer about this a few years ago and they had never heard of Notice 2014-7. I'm definitely going to pursue amending my returns for the past three years. Based on the experiences shared here, it sounds like the process is straightforward if you have proper documentation. I'm particularly encouraged by those who reported smooth processing without additional IRS questions. One thing I'm curious about - has anyone dealt with this if you provide care for multiple family members? I care for both my elderly mother and my adult brother who has autism, and receive separate waiver payments for each. I'm assuming both would qualify under the notice, but wondering if there are any special considerations for reporting multiple excluded payment streams. Thanks to everyone who shared their experiences - this community knowledge is invaluable!

I've been using FreeTaxUSA for the last 3 years and it's WAY better than TurboTax. Federal filing is completely free no matter how complicated your taxes are, and state is only $15. No hidden fees or upsells constantly popping up. TurboTax tried to charge me $120 for self-employment income the year before I switched. FreeTaxUSA handled my Schedule C, home office deduction, and mileage tracking for $0. The interface isn't as pretty but it works perfectly.

I switched from TurboTax to FreeTaxUSA last year after getting hit with unexpected fees, and honestly I wish I'd done it sooner. What really sealed the deal for me was when I discovered that TurboTax was actually steering people AWAY from the IRS Free File program that they were supposed to be promoting. I have a pretty straightforward return - W-2, some investment income, and standard deductions - but TurboTax wanted to charge me $60 for "premium" features that turned out to be completely unnecessary. FreeTaxUSA handled everything for free and the final return was identical to what I would have gotten with TurboTax. The customer service at FreeTaxUSA is also surprisingly good. When I had a question about reporting some stock sales, I got through to a real person in about 10 minutes and they walked me through it without trying to upsell me anything. It's honestly criminal how TurboTax has convinced people they're the "gold standard" when there are legitimate free alternatives that work just as well.

This thread has been incredibly helpful! I'm in a similar situation with my S Corp and was actually leaning toward the contractor approach until reading all these responses. The consensus is crystal clear - it's not worth the audit risk and actually defeats the purpose of having an S Corp structure. What strikes me most is how this seems like it should be a viable option on the surface, but the tax code and IRS guidance make it clear that owner-employees can't simply reclassify themselves as contractors to avoid payroll taxes. The whole reasonable compensation requirement exists specifically to prevent this kind of arrangement. I think the key takeaway for anyone considering this is that the S Corp tax advantages come from the proper balance of salary and distributions, not from trying to work around the employment relationship. Better to stay compliant and optimize within the established framework than risk penalties and back taxes from an audit.

Great discussion everyone! As someone who's been through multiple IRS audits with my S Corp, I can confirm that owner-contractor arrangements are absolutely a red flag they look for. During my last audit in 2022, the agent specifically asked about my compensation structure and whether I had ever tried to pay myself as a contractor. What many people don't realize is that the IRS has gotten much more sophisticated in detecting these arrangements through automated screening systems. They can easily cross-reference your 1120S with your personal return to spot inconsistencies in how you're reporting income from your own corporation. The "reasonable compensation" requirement isn't just a suggestion - it's mandatory for any S Corp owner who provides services to their business. The penalty for getting this wrong isn't just back taxes, it's also interest and potential fraud penalties if they determine you were deliberately trying to avoid payroll taxes. Stick with the tried-and-true approach: take a reasonable W-2 salary for the services you provide, then take additional profits as distributions. It's compliant, defensible, and gives you the tax benefits you're looking for without the audit risk.