I'm going through the exact same thing right now! Filed in March and got that "Action Required" message last week. It's so frustrating because like you said, there's no actual action to take. I've been checking every day hoping for some kind of update but nothing changes. At least now I know I'm not the only one dealing with this. The waiting is the worst part - especially when you're depending on that money. I'm going to try checking my transcript like others suggested, but honestly this whole system is just poorly designed for regular people to understand.

I went through this exact same situation last year and it's so stressful! That "Action Required" message is misleading because like everyone else said, there's literally no action you can take until they send you something in the mail (if they even do). In my case, I waited about 6 weeks with that same message and never got any letter. Finally got through to someone at the IRS who told me they were just doing a routine income verification and my refund was released the next week. The whole thing was basically automated - no actual issue with my return. My advice: definitely check your transcript on IRS.gov if you can get logged in (the verification process is a pain but worth it). If you can't wait and really need the money, try one of those callback services people mentioned or keep trying the IRS phone line early in the morning. But honestly, most of these reviews resolve themselves within 45-60 days even without doing anything. The worst part is how they word it like YOU need to do something when really they're just telling you to sit tight. Super poor communication on their part. Hang in there - your refund will come through!

Code 420 is definitely nerve-wracking when you first see it! I went through this exact situation about 6 months ago. The code appeared on my transcript on a Wednesday, and I got the CP2000 notice in the mail exactly 12 days later. In my case, they were questioning some 1099 income that didn't match what I reported. I gathered my documents, responded within the 30-day window, and my refund was released about 5 weeks after I sent my response. The waiting is the hardest part, but most of these examinations are really straightforward once you know what they're looking for. Hang in there!

I'm dealing with the exact same thing right now! Code 420 showed up on my transcript 3 days ago and I've been checking it obsessively ever since. Reading through everyone's experiences here is actually making me feel a lot better - sounds like it's usually not as scary as it initially seems. Really appreciate everyone sharing their timelines and outcomes. Guess I just need to be patient and wait for that letter to arrive!

The most important thing here is to just file ASAP! I put off filing late once and it only made the penalties worse. Even if you can't pay what you owe right now, file the return anyway and then set up a payment plan.

Just want to add some reassurance here - I was in the exact same situation two years ago and it really wasn't as bad as I thought it would be. Filed about 3 weeks late using TurboTax (similar to FreeTaxUSA) and the whole process was identical to filing on time. The key things that helped me: 1) File for tax year 2023 (not 2024), 2) E-filing still works normally even after the deadline, and 3) If you're getting a refund, you won't face penalties - just a delayed refund. I ended up owing about $200 and the penalty was only around $15 total. Way less scary than I'd built it up in my head! The IRS even sent me a clear breakdown of exactly what the penalty was for. Don't beat yourself up about it - life happens and this is more common than you think. Just get it filed in the next few days and you'll be fine!

I've been in a similar situation with my neighborhood book club where we pool money for venue rentals and refreshments. One thing that's helped me is creating a simple "pass-through fund agreement" that all participants sign at the beginning of each season. The agreement states that I'm acting solely as a collection agent, that all funds belong collectively to the group, and that I receive no personal benefit from handling the money. While this doesn't eliminate the need for good record-keeping, it creates a paper trail showing the intent and nature of the arrangement from the start. I also send a simple monthly summary to all participants showing total collected vs. total spent, which creates transparency and further documents that this isn't personal income. It takes maybe 10 minutes per month but gives everyone (including me) peace of mind about how the money is being handled.

Consider opening a business checking account specifically for the basketball group, even if you don't formally incorporate. Many banks offer simple business accounts that can be opened under a "doing business as" (DBA) name like "Saturday Basketball Group" without requiring formal business registration. The key advantage is that this account would have its own EIN (Employer Identification Number) rather than using your SSN, which helps separate the funds from your personal tax situation. You'd still need to maintain records showing all money collected equals all money paid out for court rental, but having a separate EIN creates clearer separation. Most banks will let you set up Zelle and other payment methods on the business account, so players can still pay electronically. The annual fees for a basic business checking account are usually minimal (often under $100/year) and could be worth it for the peace of mind and cleaner separation from your personal finances.

The key thing to remember is that the IRS calculates underpayment penalties on a quarter-by-quarter basis, not just your total for the year. So even if you're overpaid overall, you could still face penalties for specific quarters where you didn't meet the minimum requirements. However, there are some exceptions that might help in your situation. If your applied overpayment from last year is substantial enough, it might cover the required minimum for multiple quarters. The safe harbor rule generally requires you to pay 25% of your required annual amount each quarter (either 90% of current year tax or 100%/110% of prior year tax depending on your AGI). I'd recommend calculating exactly how much your Q1 payment plus the applied overpayment covers in terms of quarters. If it's enough to satisfy both Q1 and Q2 requirements under the safe harbor rules, you might be able to skip or reduce Q2. But don't just wing it - the underpayment penalty interest rate is currently pretty high, so it's worth doing the math properly. You might also want to consider making a smaller Q2 payment just to be safe, rather than skipping it entirely. Better to overpay slightly than deal with penalty notices later.

I went through this exact situation two years ago and can confirm what others have said - you absolutely can adjust your Q2 payment downward to account for being overpaid from Q1 plus your applied refund. The IRS doesn't require equal quarterly payments, just that you meet the minimum thresholds each quarter. One thing I'd add that hasn't been mentioned yet - make sure you keep really good records of all your payments and the applied overpayment amount. I recommend downloading your tax account transcript from the IRS website (you can get it instantly online) to verify that your applied overpayment is showing correctly in their system. Sometimes there can be delays in how these get processed. Also, when you do reduce your Q2 payment, I'd suggest making a note in your tax records about why you adjusted it. While you don't need to file any special forms, having documentation of your reasoning will be helpful if you ever need to explain it to the IRS or your tax preparer next year. The penalty avoidance math can definitely be tricky, so don't hesitate to use the tools others mentioned or consult with a tax professional if the numbers are substantial. A small consultation fee is usually worth it to avoid underpayment penalties, especially with how high the interest rates are right now.