Based on what you've described, I'd definitely recommend setting that $3,200 aside for at least 6 months to be safe. The IRS does have automated systems that continue checking returns even after refunds are issued, and questionable deductions are one of the things they look for. If you're genuinely unsure about those deductions, you might want to consider filing an amended return to correct any mistakes before the IRS potentially finds them. It's always better to fix errors proactively rather than wait for them to catch it - you'll avoid penalties and the stress of dealing with IRS notices. The good news is that if they were honest mistakes and not huge amounts, you're looking at paying back the incorrect refund plus interest, not massive penalties. But yeah, definitely don't spend that money until you're confident everything was filed correctly!

You're smart to be thinking about this now! From my experience, amended returns typically take 16-20 weeks to process, though it can vary depending on complexity and IRS workload. The sooner you file it, the sooner you'll have peace of mind. When you file Form 1040X (amended return), you'll need to explain what you're changing and why. If you end up owing money, you can pay it with the amendment to avoid additional interest charges. If you're not sure exactly what needs to be corrected, you might want to consult with a tax professional or use one of those AI review services others mentioned to identify the specific issues before filing the amendment. The key is being proactive - the IRS looks more favorably on taxpayers who catch and correct their own mistakes versus those who get caught later during an audit.

Something else to consider - make sure you're using the correct year's Form 982. The form changed slightly a couple years ago, and I accidentally used an outdated version at first. You can get the current form directly from the IRS website. Also worth noting that if you had multiple debts discharged in bankruptcy, you'll need to account for all of them on Form 982, not just the ones where you received a 1099-C. Some creditors don't send 1099-Cs for debts discharged in bankruptcy even though they're supposed to.

I went through this exact situation and can confirm what others have said - you don't need to stress about getting the 1099-C corrected before filing. The code G vs code A issue is actually pretty common with creditors who don't fully understand bankruptcy procedures. Here's what worked for me: I filed Form 982 checking box 1a for "Discharge of indebtedness in a title 11 case" and included the full amount from the 1099-C in Part II. I also attached a brief statement to my return explaining that the debt was discharged in Chapter 7 bankruptcy despite the incorrect reporting code on the 1099-C. The key is having your bankruptcy discharge paperwork readily available in case the IRS has questions later. I kept copies of my discharge order and the creditor matrix showing this specific debt was included. Never had any issues with my return being accepted or processed. Don't let the incorrect code cause you to delay filing - Form 982 is specifically designed to handle these situations regardless of how the creditor coded the cancellation.

Here's a real-world example that helped me understand this concept: I'm a writer living in France, and a US publisher pays me royalties for a book I wrote. I don't have a US office, don't come to the US for business, and have no US employees. Those royalties are definitely US-sourced (because the publisher is in the US), but they're NOT effectively connected with a US trade or business (because I don't have an office or employees in the US and don't regularly come to the US to conduct business). So I pay a flat 0% tax on these royalties thanks to the US-France tax treaty (it would normally be 30% without a treaty). It's reported on Form 1042-S, and I don't even need to file a US tax return. Hope this helps!

Don't forget that US Social Security benefits paid to non-residents also fall into this middle category! If you worked in the US in the past but now live abroad, your Social Security payments are US-sourced income not effectively connected with a trade or business. These are generally subject to 30% withholding unless your country has a tax treaty with better terms. For example, Canada's treaty makes US Social Security completely exempt from US tax for Canadian residents.

I'm dealing with this exact same situation right now - got slapped with a $25K penalty for filing Form 5472 about 2 weeks late, and it was completely blank with no transactions to report. Reading through all these responses is giving me hope that I'm not completely screwed here. What strikes me is how many people have mentioned that the IRS does seem to recognize these blank form penalties as being disproportionate, even if they won't admit it officially. The fact that multiple people here have gotten significant reductions or full abatements suggests there's definitely room to fight this. I'm planning to take a multi-pronged approach based on what I've learned here: craft a detailed letter emphasizing this is my first time with Form 5472, highlight that the form was blank with zero reportable transactions, and then follow up with calls to make sure it doesn't get lost in the system. The penalty analysis tools mentioned here sound like they could really help me put together a stronger case than I would on my own. Has anyone had experience with how long the whole process typically takes from initial request to final decision? I'm trying to plan my cash flow around this nightmare.

I've been following this thread with great interest as I'm facing a similar situation with Form 5472 penalties. What really stands out to me from all these experiences is that the IRS seems to have more flexibility with these penalties than they initially let on, especially for blank forms. One thing I'm noticing is that successful cases seem to share a few key elements: emphasizing it's your first time dealing with Form 5472, highlighting that the form was blank with no reportable transactions, and demonstrating overall good compliance history. The proportionality argument also seems powerful - a $25K penalty for a procedural violation with no tax revenue impact is genuinely harsh. For those still fighting these penalties, it sounds like the combination of a well-crafted written request followed by persistent phone calls to ensure processing is the way to go. The success stories here are really encouraging - it shows these penalties aren't as set in stone as they initially appear. I'm curious if anyone has noticed whether certain IRS offices or regions are more receptive to these requests than others? Or if there are particular times of year when the IRS might be more willing to consider penalty relief?

25 Has anyone here dealt with filing a final 1120 when you still had ongoing litigation against the corporation? My situation is similar to the original poster, but we have a pending lawsuit that might not be resolved for another year or more.

Just went through this exact situation last year with my dissolved S-Corp. Definitely use your personal address on the final Form 1120 - the IRS needs to be able to reach you for any follow-up questions or notices, and using an inaccessible business address will only create headaches later. One thing I'd add that hasn't been mentioned yet - make sure you also file Form 966 (Corporate Dissolution or Liquidation) within 30 days of adopting the plan of dissolution if you haven't already. Since you dissolved in December 2023, you may have missed this deadline, but it's still worth filing even if late to properly notify the IRS of the dissolution. Also, keep copies of your state dissolution paperwork with your tax records. The IRS sometimes requests this documentation to verify the dissolution date and process. Using your home address ensures you'll actually receive any such requests.