Great advice from everyone here! Just wanted to add that if you're feeling overwhelmed by all the different requirements (federal, state, dissolution procedures), don't forget that the IRS also has some helpful resources on their website. Publication 3402 specifically covers tax issues for LLCs, including inactive ones. Also, make sure to keep good records of everything you do to close the LLC - the dissolution paperwork, any final tax filings, correspondence with state agencies, etc. This documentation will be valuable if any questions come up later. I learned this the hard way when I had to reconstruct paperwork for an old business years later. One last tip: if you formed the LLC late in the year and it truly had zero activity, some tax preparers recommend including a statement with your return explaining the situation (like "LLC formed in December 2023, no business activity conducted"). It's not required but can help prevent any confusion if the IRS has questions.

This is such a common situation - I went through the exact same thing two years ago! I formed an LLC for what I thought would be a great online business, but it never got off the ground. Here's what I learned from my experience: First, yes you absolutely need to address it on your taxes even though it did nothing. Since it's a single-member LLC, you'll file Schedule C with all zeros. The key thing is to show the IRS you're being transparent about the entity's existence. For dissolution, I found the process varies a lot by state, but most require filing dissolution paperwork with the Secretary of State and paying a small fee. Some states also want you to publish a notice in a local newspaper, but many have exceptions for LLCs that never operated. One thing that really helped me was keeping a simple log of everything I did to close it down - the dates I filed paperwork, confirmation numbers, etc. It gave me peace of mind knowing I had documentation if any questions came up later. Don't stress too much about this - it's more common than you think, and the process is usually pretty straightforward once you know the steps. The important thing is addressing it properly rather than just ignoring it.

Hey OP, any updates? Did you manage to get through to anyone?

This is super frustrating! I had a similar issue last year where my transcript showed a deposit date but the money didn't hit my account for another week. Turns out there was a processing delay on the IRS side that wasn't reflected in the system. The key thing is to keep checking your transcript for any new codes that might pop up. If you see a 571 or 570 code appear after the 846, that means there's a hold. Also, double-check that your direct deposit info matches EXACTLY what you have on file with your bank - sometimes even extra spaces can cause issues. Hang in there, it'll come through!

Something to be aware of - the recharacterization makes it look like you never contributed to the Roth in the first place, but your 2024 conversion of $7,500 from Traditional to Roth IS reportable on your 2024 taxes. You'll get another 1099-R for that. And don't forget about Form 8606 for the Traditional IRA contribution. It's super confusing but critical to track the non-deductible contributions if you're over the income limit!

This is exactly the kind of situation that trips up a lot of people! The key thing to understand is that a recharacterization is treated as if the original contribution never happened to the Roth - it's like going back in time and making the contribution to the Traditional IRA instead. A couple of important points for your specific situation: 1. Yes, you need to amend your 2023 return even though the recharacterization happened in 2024. The IRS treats this as correcting your 2023 tax year. 2. The $12.7K on your 1099-R includes both your original $6,900 contribution plus the earnings that accumulated while it was in the Roth account. 3. When you amend, you're not adding $12.7K to your AGI. Instead, you're claiming a Traditional IRA deduction for the $6,900 (assuming you're eligible based on your income and whether you have a workplace retirement plan). 4. Don't forget to file Form 8606 with your amended return if you can't take the full deduction due to income limits. This tracks your basis for future withdrawals. The TurboTax error makes sense - it's detecting that you need to handle the recharacterization properly on your prior year return before it can process your current year taxes correctly.

Sometimes the best approach is to contact the Taxpayer Advocate Service. They have authority to cut through red tape when you're experiencing hardship due to IRS delays.

I went through this exact same nightmare last year! Filed in March, got the identity verification hold, and waited 8 weeks for a letter that never came. Finally used Claimyr to get through to someone and discovered they had my address wrong in their system. The agent was able to verify my identity right there on the phone and released my refund within days. Before that call though, I used taxr.ai to analyze my transcript and it showed me exactly what codes were on my account - turned out I had the 570/971 combo which confirmed the identity verification hold. Really helped me understand what was happening instead of just guessing. My advice: don't wait much longer for that letter. If you're already at 5 weeks, there's probably an issue. Either the letter got lost, went to wrong address, or there's some other problem. Getting a human on the phone is really your best bet at this point. The verification process itself only takes a few minutes once you actually talk to someone who can help!

This thread has been incredibly helpful! I'm currently preparing my OIC application and was really worried about my $28k in available credit limits. Reading everyone's experiences has given me a much clearer picture of how to approach this. A few additional points that might help others in similar situations: My tax attorney emphasized that the IRS wants to see that you're not just trying to avoid paying what you legitimately owe, but that you genuinely cannot pay the full amount without creating severe financial hardship. Having high credit limits doesn't automatically disqualify you, but you need to demonstrate why using that credit isn't a reasonable solution. I'm also documenting that most of my available credit is already being used for essential expenses like medical bills and home repairs that aren't fully covered under IRS allowable expenses. This helps show that the "available" credit isn't really available for tax payments. One thing I'm curious about - has anyone dealt with business credit cards that were used for personal expenses during financial hardship? I have about $8k in business credit that I had to use for living expenses when my business income dropped, and I'm not sure how to present that in the OIC application.

This has been such an informative discussion! I'm a tax professional who works with OIC cases regularly, and I wanted to add a few technical points that might help clarify some confusion I'm seeing in the thread. The IRS uses Form 433-A (Collection Information Statement) to evaluate your "reasonable collection potential" (RCP). Available credit is considered part of your asset base, but it's not automatically counted dollar-for-dollar against you. The examiner looks at your total financial picture - if using available credit would push your monthly obligations beyond sustainable levels, they typically won't expect you to do so. One thing I haven't seen mentioned is that the IRS has specific guidelines for evaluating credit in OIC cases. They consider factors like: current utilization rates, minimum payment obligations if credit were used, your debt-to-income ratio, and whether using credit would prevent you from meeting basic living expenses under their allowable standards. For those asking about timing - avoid any major financial changes (like closing accounts) within 6 months before filing unless absolutely necessary. If you must make changes, document the legitimate reasons thoroughly. Also, while services like taxr.ai and Claimyr can be helpful, make sure you're working with a qualified tax professional who understands OIC procedures. The application is complex and mistakes can lead to automatic rejection, wasting months of time.