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Does anyone have experience with capitalizing contract acquisition costs under ASC 340-40 alongside ASC 606 implementation? We're paying sales commissions for multi-year deals and I'm wondering if we should capitalize these costs and amortize them over the expected customer life.
Yes, you should definitely be capitalizing those sales commissions under ASC 340-40! We went through this recently. Any commission that wouldn't have been paid if the contract wasn't obtained should be capitalized and amortized over either the contract period or the expected customer life, whichever is longer. We found that our average customer stays for about 5 years even though our contracts are technically 2-3 years, so we amortize over the 5-year period. Just make sure you have good data to support your expected customer life calculation.
Thank you! That's really helpful. We have solid data showing customers stay about 4 years on average despite our 2-year contracts. I'm going to implement the 4-year amortization schedule. Our auditors initially pushed back on capitalizing anything beyond the contract term, but I'll use our retention data to make the case for the longer amortization period.
Luis, I've been through this exact ASC 606 implementation process with multiple SaaS companies, and you're asking the right questions. The implementation fee recognition is indeed one of the trickiest parts. Here's my take based on your specific situation: Since your implementation is essentially setting up your software (not a standalone service the customer could use independently), it should be recognized over the expected customer relationship period, not immediately. Even with the 30-day cancellation clause, you should use your historical data to estimate how long customers actually stay. For the $15K implementation + $3K monthly structure, I'd recommend: 1. Determine if implementation is distinct from the software (sounds like it's not) 2. Calculate total contract value including expected renewals based on your data 3. Recognize implementation revenue over that expected period 4. Track actual vs. expected customer life to refine your estimates One key point your auditors should agree on: the cancellation clause doesn't automatically make this month-to-month recognition if customers typically stay much longer. Document your customer retention analysis well - this will be crucial for audit support. Also, make sure you're considering ASC 340-40 for capitalizing sales commissions on these multi-year deals. Those should be amortized over the same customer life period you use for implementation fees. Happy to dive deeper into any specific scenarios if helpful!
This is incredibly helpful, Chris! I'm curious about the documentation requirements for supporting the expected customer life calculation. What specific metrics and analysis did you find auditors wanted to see when justifying a longer amortization period than the stated contract term? We have good retention data showing customers stay an average of 3.2 years, but our contracts are technically 2-year terms with auto-renewal. I want to make sure I'm building the right documentation package before presenting this approach to our auditors.
Went through this last year and what worked for me was calling the Taxpayer Advocate Service. They're an independent organization within the IRS that helps when you're having financial difficulties or when the normal IRS channels aren't working. They assigned me an advocate who helped review my reconsideration request before I submitted it and even followed up with the IRS for me. Completely free service too. Google "Taxpayer Advocate Service" + your state to find your local office.
This is really helpful - I didn't know about the Taxpayer Advocate Service. Did they help you with the actual writing of the letter or just review what you had already prepared?
They actually helped me with both! My advocate reviewed my draft letter and suggested several improvements - like being more specific about which tax code sections supported my position and reorganizing my evidence to match the order of issues in the audit report. They also helped me understand what the IRS was really looking for in each disputed item. The best part was that they stayed involved throughout the process and could check on the status of my case internally, so I didn't have to deal with the phone system nightmare. Definitely reach out to them early in the process if you can - they can prevent a lot of headaches.
I went through the same struggle a few months ago and ended up combining several approaches mentioned here. First, I used the IRS publication that Ethan linked - it really does give you the framework even without an exact template. Then I contacted the Taxpayer Advocate Service like Carmen suggested, and they were incredibly helpful in reviewing my draft and making sure I addressed all the specific points from my audit notice. The key thing I learned is that organization matters more than perfect writing. I created a simple table that listed each disputed item from the audit in one column, my response/explanation in the middle column, and the supporting document reference in the third column. This made it crystal clear for the IRS reviewer to follow my logic. One tip that really helped: I started each paragraph addressing a disputed item with "Regarding [specific line item from audit notice]..." and ended each section with "See attached Exhibit [letter]." This kept everything focused and easy to follow. The whole letter ended up being about 1.5 pages, but it was backed up by well-organized exhibits. Don't let the formal writing intimidate you - clear, factual communication is what they're looking for, not fancy language. Good luck!
This is exactly the kind of structured approach I was looking for! The table format you described sounds like it would really help me organize my thoughts and evidence. I've been struggling with how to connect each piece of documentation to the specific issues the IRS raised in my audit. Quick question - when you say "Exhibit [letter]" did you actually label your attachments as Exhibit A, Exhibit B, etc.? And did you include a separate index or table of contents for all your exhibits? I have quite a bit of supporting documentation and I'm worried about the IRS reviewer getting lost in all the paperwork. Also, how did you handle situations where one document supported multiple disputed items? Did you reference the same exhibit multiple times or make copies?
Wait, something doesn't add up in your numbers. At your income levels, a $4,400 federal tax bill actually sounds about right if you're filing jointly. With $105K combined income, your federal tax would be roughly in that range after the standard deduction. Are you sure the issue is with his withholding being too low, or could it be that both of your withholdings are a bit low? If you've always gotten refunds before, maybe something else changed this year - did either of you have any other income sources? Investment gains? Retirement withdrawals?
I was thinking the same thing. Using a quick tax calculator, married filing jointly with $105K income would have a federal tax of around $9-10K total. If they each had some withholding (even if his was low at 1.5%), the final bill being $4.4K doesn't sound wildly off.
You're absolutely right to be concerned about that withholding rate! 1.5-2% federal withholding is way too low for almost any income level. For context, even someone making minimum wage should typically have around 10-12% withheld for federal taxes when you factor in income tax and FICA. Here's what I'd recommend doing immediately: 1. **Document everything** - Take photos of recent paystubs showing the low withholding percentages and keep copies of the W-4 he submitted. 2. **Contact payroll/HR in writing** - Email them (so you have a paper trail) asking them to explain why federal withholding is only 1.5% when the W-4 shows 0 exemptions. Request they review their payroll calculations against IRS Publication 15 (Employer's Tax Guide). 3. **Submit a new W-4** - Use the current 2020+ version and fill it out using the IRS withholding calculator. This will give you the most accurate withholding going forward. 4. **For the current tax debt** - You can request penalty relief from the IRS if you can prove the underpayment was due to employer error. Form 843 (Claim for Refund) can be used to request abatement of penalties, though you'll still owe the underlying tax. The math on your situation does seem off though - even with his low withholding, $4,400 owed on $105K combined income suggests there might be other factors at play. Double-check that there weren't any other income sources or changes in tax situations from previous years.
I work IT and this is actually embarassing. A government agency in 2025 shouldnt have these basic infrastructure issues. But here we are š¤·āāļø
Ugh same exact issue here! Been getting that "Refund status unavailable" message since yesterday morning. The worst part is you can't even tell if it's a system problem or if there's actually an issue with your return. At least give us a proper error code or something instead of this generic "try again later" nonsense. Filed in late January and still nothing - this is ridiculous for a government system in 2025.
Totally feel your pain! I've been dealing with the same thing for days now. It's so frustrating when you can't even tell if it's their servers being down or if something's wrong with your actual return. Like you said, a simple error code would be SO helpful instead of this vague "try again later" message. Filed around the same time as you and still stuck in limbo š©
GalaxyGazer
I'm dealing with this exact same issue right now! Started about 3 hours ago for me - was checking my payment plan details and suddenly got locked out with that same "Your Information Is Not Available at This Time" error. What's weird is that I can still log in and see the main dashboard, but any time I try to access actual tax info for 2024, it throws that error about account adjustments. I definitely haven't requested any adjustments either. Really hoping this clears up soon because I need to make a payment this week and can't even see my current balance. At least now I know it's not just my account that's acting up!
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Genevieve Cavalier
ā¢Ugh, this is so frustrating! I'm a newcomer here but having the exact same problem. Just filed my first tax return this year and was trying to set up a payment plan, but now I can't access anything. Really stressing me out since I'm new to all this tax stuff and don't know if this is normal or not. Thanks for posting about it - at least now I know it's not something I did wrong! š
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Jamal Anderson
I'm experiencing this exact same issue! Been locked out for about 4 hours now. I was in the middle of reviewing my 2024 return details when the system suddenly started throwing that "Your Information Is Not Available at This Time" error. What's really concerning is that I can still navigate the main menu but can't access any actual tax data - just get that message about account adjustments that I never requested. I was planning to make a payment today too, so this timing is terrible. Really hope the IRS gets this sorted out quickly because being unable to access basic account information during filing season is incredibly stressful!
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Lucas Kowalski
ā¢I'm new to this community and having the exact same problem! Just started dealing with taxes this year and was so confused when I couldn't access my account info. Really relieved to find this thread - I was worried I had messed something up when setting up my account. The timing is awful since I'm still learning how all this works and now can't even see basic information. Hoping the IRS fixes this soon because navigating tax stuff as a beginner is stressful enough without website issues! š
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