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I successfully navigated an identical audit situation last tax season. For the EIC verification, I provided my W-2 and final paystub showing YTD earnings. For Child Tax Credit, I submitted: (1) birth certificate establishing relationship, (2) school records showing your address, and (3) medical records with both names. For Head of Household, I included: lease agreement, three utility bills from different months, and property insurance showing I maintained the household. The IRS accepted everything without follow-up questions and released my refund approximately 6 weeks after submission. The key was providing clear documentation for each specific requirement without overwhelming them with extraneous paperwork.
Just went through this exact same audit combo last year - EIC, Child Tax Credit, and Head of Household. Here's what worked for me: For EIC, your W-2 is absolutely sufficient (don't send all those paystubs). For Child Tax Credit, birth certificate + school enrollment records showing your address will do it. For HOH, I sent my lease agreement, 3 utility bills (spread throughout the year), and a brief letter explaining how I maintained the household. The IRS processed everything in about 5 weeks. Pro tip: organize everything in the order they list it in their letter, use a simple cover sheet, and send certified mail. Don't overthink it - they just need to check the boxes that you qualify for what you claimed.
Reading through this thread has been incredibly helpful! I'm dealing with a similar situation with my fitness studio. We were forced to close completely for 3 months in 2020, then allowed to reopen but with severe capacity restrictions (from 40 people per class down to 8) and no group fitness classes allowed - which was about 60% of our revenue. I've been hesitant to claim the ERC because I wasn't sure if the capacity restrictions counted as a "partial suspension" once we reopened. But based on what everyone's shared here, it sounds like we clearly meet the "more than nominal" threshold since group classes were such a significant part of our operations. The documentation advice about keeping records of specific government orders is spot on. I still have all the health department notices that detailed exactly when restrictions changed and what we were/weren't allowed to do. One question for those who've been through this process: when calculating qualified wages, do you include wages paid to employees who were working reduced hours due to the capacity restrictions, or only wages paid during periods of complete closure? The IRS guidance on this specific scenario has been confusing. Thanks to everyone who's shared their experiences - it's made me much more confident about moving forward with our claim!
Great question about qualified wages during capacity restrictions! For periods when you were operating under partial suspension (like your capacity limits), you can generally include wages paid to all employees, even those working reduced hours due to the restrictions. The key is that the wages need to be paid during a quarter when your business qualified for ERC due to the partial suspension. So if your capacity was limited to 8 people per class instead of 40, and group classes were suspended entirely, those restrictions likely qualify your entire business for that quarter - meaning wages paid to instructors, front desk staff, cleaning crew, etc. during that time would all be eligible. However, there are some nuances around wages paid to employees who were providing services versus those who couldn't work due to the suspension. I'd definitely recommend getting professional guidance on the specific calculation since the wage rules can get complex, especially when you're dealing with both complete shutdowns and partial reopening periods. Your situation with the documented progression from complete closure to capacity restrictions sounds like a textbook case for ERC qualification across multiple quarters. The fact that group classes (60% of revenue) were completely suspended even during "reopening" really strengthens your case.
This has been such a valuable discussion! I'm a CPA who's helped dozens of clients with ERC claims, and I wanted to add a few additional points that might help others navigating this process. First, for those still unsure about documentation - the IRS isn't looking for perfect financial analysis. They want to see that you can reasonably demonstrate the government orders had a meaningful impact. A simple comparison showing your normal operations versus what you were allowed to do under restrictions is often sufficient. Second, don't overlook the interconnected nature of business operations. Even if one part of your business could continue, restrictions on another part can qualify your entire business. For example, if a restaurant's dining room closure forced them to lay off servers and reduce kitchen staff, the impact extends beyond just the dining area. Third, timing matters for quarterly qualification. You need to identify the specific quarters when restrictions were in effect. Some businesses qualify for 2020 Q2-Q4, others might qualify for different periods depending on when their local orders were implemented. Finally, I've seen businesses miss out on legitimate claims because they assumed they didn't qualify. The "more than nominal" test is more forgiving than many realize - if you had to significantly change how you operate due to government orders, you likely qualify. Don't let perfect be the enemy of good when it comes to documentation. The tools and resources mentioned in this thread (like taxr.ai for analysis and Claimyr for IRS communication) can definitely help, but the most important thing is getting started and not leaving money on the table due to confusion or hesitation.
This is such helpful perspective from a professional! I'm new to this community and have been lurking while trying to understand if my small photography business qualifies for ERC. We had to cancel all indoor photo shoots and wedding receptions for about 5 months due to local health orders, which was roughly 80% of our business. We pivoted to outdoor sessions only, but that severely limited our capacity and revenue potential. Based on everything shared in this thread, it sounds like we clearly meet the "more than nominal" test since indoor events were such a major part of our operations. I've been hesitant to pursue this because the rules seemed so complex, but your point about not letting perfect be the enemy of good really resonates. Quick question - when you mention quarterly qualification, if restrictions started mid-quarter (like March 15th), does the entire quarter qualify or do you need to prorate based on when orders went into effect? Thanks to everyone who's contributed to this discussion - it's given me the confidence to move forward with documenting our situation properly!
I can totally relate to not wanting to get your hopes up after going through disappointments! The code 290 with $0.00 is actually a really positive sign - it means the IRS has received and accepted your amended return for processing. That 'as of' date of 6/10/2024 is when their system is scheduled to cycle through and potentially post new updates to your account. From what I've seen in this community, many people start seeing additional movement (like refund codes) within a few weeks of their 'as of' date. The waiting is absolutely brutal, but you're definitely in the system now and moving forward! I'd suggest checking your transcript once a week rather than daily - it helps preserve your sanity while keeping you informed. You've got this!
Thanks for the encouragement! This whole process has been such a learning curve. I really appreciate everyone sharing their experiences - it helps so much to know I'm not alone in this waiting game. The weekly check approach seems to be the consensus here and honestly makes way more sense than my current daily refresh habit. I'm going to try to stay patient and trust that the system is working, even if slowly. Fingers crossed that 6/10 date brings some good news!
I totally get the anxiety around not wanting to get your hopes up - amended returns can be such an emotional rollercoaster! But honestly, seeing that code 290 with $0.00 is actually really encouraging. It means the IRS has officially acknowledged your amended return and it's entered their processing pipeline. That 'as of' date of 6/10/2024 is particularly interesting because it's when their system is scheduled to cycle through and potentially post updates to your account. From my experience helping others navigate this process, many people see their next set of codes (hopefully including refund codes!) appear within 1-3 weeks of their 'as of' date. The hardest part - getting into the system - is behind you now. I'd recommend checking your transcript maybe once or twice a week rather than daily to save your sanity. The waiting is brutal, but you're definitely moving in the right direction. Keep us posted on what happens around that 6/10 date!
This is exactly the kind of detailed explanation I needed to hear! I'm dealing with my first amended return and honestly had no idea what any of these codes meant. The timeline of 1-3 weeks after the 'as of' date gives me something concrete to focus on rather than just endless waiting. I really appreciate how you broke down that the hardest part (getting into the system) is already done - that perspective shift actually helps a lot with the anxiety. I'm definitely going to adopt the twice-weekly check schedule. Thank you for taking the time to explain this so thoroughly!
Great point about the rounding issue! I just double-checked my numbers and thankfully they do add up to exactly 100%, but that's definitely something I wouldn't have thought to verify. It's crazy how a tiny rounding error can trigger IRS scrutiny when you're trying to fix a legitimate mistake. Based on all the advice here, it sounds like my best path forward is to: 1. File corrected K-1s marked "CORRECTED" for just the two affected partners 2. Include a cover letter with our EIN, tax year, and explanation that only ownership percentages needed correction 3. Attach relevant pages from our partnership agreement showing the correct percentages 4. Verify all percentages across all partners still total exactly 100% Thanks everyone for the detailed guidance - this has been incredibly helpful! Much better than the vague advice I was getting from other sources.
That's a solid plan! Just wanted to add one more thing - when you send the corrected K-1s to your partners, make sure to include a note about whether they need to amend their individual returns. Since you mentioned the percentage changes (12.5% to 14.2% and 18.3% to 16.6%), depending on your partnership's income levels, this could result in meaningful dollar differences on their personal tax returns. Some partners might need to file amended 1040s if they've already submitted their returns with the incorrect K-1 information. Better to give them a heads up now so they can check with their tax preparers if needed.
Just wanted to chime in as someone who's dealt with K-1 corrections multiple times. Your situation is actually pretty straightforward - corrected K-1s are definitely the way to go rather than amending the entire 1065. One additional tip that saved me headaches: when you prepare the corrected K-1s, make sure to use the exact same form version and format as your original filing. The IRS can get picky about consistency between original and corrected forms. Also, consider sending the corrected K-1s to your partners via certified mail so you have proof of delivery - this can be helpful if any questions come up later about when they received the corrections. The advice about documenting everything is spot on. Keep copies of all your correspondence and supporting documents in case the IRS has follow-up questions. In my experience, when you're proactive about explaining the correction and provide clear documentation, the IRS processes these amendments pretty smoothly.
Thanks for the tip about using the exact same form version - that's something I definitely wouldn't have thought about! I'm also glad you mentioned certified mail for the partners. Given how much back-and-forth there's been on getting this right, having that delivery confirmation will give me peace of mind. Quick question - when you say "exact same form version," do you mean I should use the same year's K-1 form that I used for the original filing, even if there's a newer version available now? I want to make sure I don't accidentally create another issue while trying to fix this one.
Finnegan Gunn
I'm on day 5 of my 570 code and this thread is exactly what I needed! š The daily transcript checking addiction is so real - I never thought I'd be refreshing a government website like it's my favorite social media app. What's really helpful about everyone's experiences is seeing the actual day counts rather than vague timeframes. My situation sounds similar to many here - filed with just W-2 income and standard deduction, nothing complicated. Based on the patterns I'm seeing, it looks like straightforward returns like mine typically resolve in that 14-21 day window that keeps coming up. The hardest part for me is not knowing which category I fall into - am I in the "routine verification" group that resolves quickly, or is there actually an issue? But reading everyone's stories, it seems like most 570 codes are just part of normal processing these days, especially compared to the horror stories from the pandemic years. Thanks to everyone for sharing real data points instead of just saying "be patient" - it's so much more valuable to see actual timelines from people who've been through this!
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Miguel Harvey
ā¢I'm on day 1 of my 570 code and already feel like I've joined some sort of support group! š Reading through everyone's experiences has been both incredibly helpful and slightly terrifying - I had no idea how common the daily transcript checking obsession would become. My return is also super straightforward (W-2, standard deduction, no complications), so based on all the timelines shared here, I'm cautiously optimistic about that 14-21 day range everyone keeps mentioning. It's wild how much more useful real experiences are compared to the generic "processing takes time" responses you get from official sources. Already bookmarking this thread for my inevitable daily dose of reassurance over the next few weeks! Thanks to everyone for creating such a helpful resource for us transcript-refresh addicts.
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Isabella Costa
I'm on day 7 of my 570 code and honestly, this thread has become my daily dose of sanity! š The transcript checking addiction is so real - I've literally set phone alarms to remind myself NOT to check it more than once a day (spoiler alert: the alarms don't work). What's really reassuring is seeing how consistent everyone's timelines are for standard returns. Mine is about as basic as it gets - single filer, W-2 income, standard deduction, no dependents or credits claimed. Based on all the data points shared here, it looks like I should expect resolution somewhere in that 14-21 day sweet spot that keeps coming up. The uncertainty is definitely the worst part - you just don't know if you're in the "normal processing" queue or if there's actually an issue brewing. But reading through everyone's experiences, it's clear that the vast majority of 570 codes resolve themselves without any action needed, which is oddly comforting. Thanks to everyone for sharing actual day counts and real experiences instead of the generic "it varies" responses you get everywhere else. This thread is going straight to my bookmarks for the inevitable daily anxiety check-ins over the next week or two! š
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Elin Robinson
ā¢I'm literally on day 1 of my 570 code and already diving deep into this thread like it's my new bible! š Your point about setting alarms to NOT check the transcript is hilarious - I can already tell I'm going to be that person refreshing it multiple times a day despite my best intentions. My return is also super basic (W-2, standard deduction, single filer), so reading everyone's experiences with similar situations gives me hope that I'll be in that 14-21 day range too. It's crazy how this whole process turns us into amateur data analysts, tracking patterns and timelines like we're conducting scientific research! Thanks for sharing your experience - knowing I'm about to join the ranks of daily transcript checkers makes me feel less crazy about the whole thing. Here's hoping we both see that magical 846 code sooner rather than later! š¤
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