That pre-filing freeze from February is a red flag - it usually means the IRS had your SSN flagged in their system before you even submitted your 2023 return. This could be due to identity verification issues, prior year problems, or suspected fraud activity on your account. The codes 971/977 from June likely represent IRS-initiated adjustments rather than something you filed. When the IRS finds discrepancies during processing, they sometimes code it as an "amended return" even though it's their internal correction. Your cycle 1305 puts you in a later processing batch, but with that 810 freeze active, cycle timing becomes irrelevant until it's resolved. The sequence numbers indicate your case is in manual review. I'd strongly recommend: 1. Call the IRS directly at 1-800-829-1040 to ask about the February freeze 2. Request all notices sent to your address - you may have missed something 3. Consider contacting Taxpayer Advocate Service if you've been waiting over 21 days past your cycle date Don't expect movement until that 810 code is cleared. The amendment processing will add 16+ weeks once the freeze is lifted.

The February freeze date is definitely the key issue here - that's what's holding everything up. When you see an 810 code dated before your filing date, it usually means the IRS had a systematic flag on your account, possibly from identity theft, prior year issues, or income reporting discrepancies they detected through third-party matching. Those 971/977 codes from June are likely IRS-generated adjustments, not something you filed. They often code their internal corrections as "amended returns" even when the taxpayer didn't submit anything. A few things to check: - Log into your IRS online account to see if there are any notices posted there - Call 1-800-829-1040 and ask specifically about the February 8th freeze code - Check if someone may have attempted to file a return using your SSN early in the year The cycle 1305 timing becomes irrelevant with that active freeze. Until the 810 is resolved, your refund stays frozen regardless of processing cycles. Once lifted, you're still looking at additional weeks for the amendment processing. This situation definitely warrants a call to Taxpayer Advocate Service (1-877-777-4778) since you've been impacted for months without clear communication from the IRS.

Has anyone dealt with the tax consequences if the IRS accepts the revocation? I'm thinking about revoking my S-Corp too, but I'm worried about how to handle things like the built-in gains tax or other penalties.

I've been through this exact scenario with a client earlier this year. The timing is actually in your favor since you're still within the same tax year. Here's what worked for us: We submitted Form 8832 with a detailed letter explaining that the S-Corp election was made in error and requesting to revert to disregarded entity status. The key was emphasizing that no S-Corp tax returns had been filed and no payroll had been processed under the election. The IRS approved our request within about 6 weeks. What really helped was including a copy of the original S-Corp election acceptance letter and clearly stating that we wanted the entity treated "as if the S-Corp election had never been made." For New Jersey, you'll definitely want to contact them separately. NJ doesn't automatically follow federal changes, so you may need to file additional paperwork there. Honestly, if your client is having serious doubts this early, it's probably worth pursuing the revocation rather than being stuck with an unwanted election for 5 years. The administrative burden of S-Corp compliance isn't worth it if it doesn't fit their business model.

Has anyone used a Certified Acceptance Agent (CAA) for their ITIN application? After my first rejection, I went to a local CAA and they handled everything. Worth the fee since they verified my documents on the spot and I didn't have to mail my original passport. Might be worth looking into if you're reapplying.

I went through this exact same situation last year! The key thing to understand is that when they say "we'll process your return without an ITIN," they mean they'll accept it as filed and it counts toward your filing deadline, but they won't issue any refund until you have a valid ITIN. For your next steps: carefully review your CP567 notice to see if it gives any hints about what was missing. Common issues include documents not being properly certified, missing signatures, or incomplete Form W-7. When you reapply, make sure to include a complete copy of your original tax return - this helps them match everything up in their system. One tip that saved me time: if your rejection notice is vague about what's missing, try calling the ITIN hotline at 1-800-908-9982. The wait times are brutal, but if you can get through, they can sometimes tell you exactly what documentation issue caused the rejection. Good luck with your reapplication!

Just want to add that if you're a "small business taxpayer" under the tax law (meaning under $26 million in gross receipts), you have ADDITIONAL inventory simplifications available. You can treat inventory as "non-incidental materials and supplies" which means you deduct them when used or consumed, not through formal COGS calculations. Publication 538 doesn't explain this super clearly, but the guidance in Revenue Procedure 2018-40 does.

This is exactly the kind of situation where the simplified rules for small businesses really shine! Since you're clearly under the $26 million threshold, you have several advantages that larger businesses don't get. One thing I'd add to the great advice already given - when you switch back to cash method, you might also want to consider the "materials and supplies" election under Section 1.162-3. This lets you deduct the cost of your wood, hardware, and finishing materials when you actually use them in projects, rather than having to track them as formal inventory with COGS calculations. The combination of cash method + materials/supplies treatment could be perfect for a custom furniture business. You'd record income when customers actually pay you, and you'd deduct material costs as you use them in projects. Much simpler bookkeeping than accrual with full inventory tracking! Just make sure when you file Form 3115 that you're clear about both changes - the accounting method change AND any inventory method changes. The IRS likes transparency about exactly what you're switching from and to.

Just adding in case this helps - for scholarship or fellowship grants to non-resident aliens, the portion for tuition and books isn't taxable, but the portion for living expenses is considered FDAP subject to 30% withholding unless a tax treaty applies. I learned this after receiving a small research stipend as a visiting scholar at a US university. The university withheld 30% automatically from the living allowance portion.

Great question about FDAP income reporting! You're absolutely correct - as a non-resident alien, you generally only need to report FDAP income that's from US sources. Your Canadian accountant's confusion is understandable since this is a specialized area. For your specific situation with dividends from US stocks, these would definitely be US-source FDAP income subject to reporting. The good news is that under the US-Canada tax treaty, dividend withholding is typically reduced from 30% to 15% if you properly complete Form W-8BEN with your broker. One thing to watch out for - make sure your brokerage is applying the correct treaty rate. I've seen cases where non-resident aliens had too much tax withheld because they didn't properly claim treaty benefits, then had to file Form 1040-NR to get a refund. Your Japanese and European dividends, as others have mentioned, aren't reportable to the US - those would be handled under Canadian tax rules as a Canadian resident.