Has anyone considered the possible legal implications beyond just taxes? Letting someone else use your account on gig platforms usually violates their terms of service. Could she get in trouble with the platform too?

This is a really tricky situation that I've seen cause headaches for people. The key thing to understand is that the IRS computer systems automatically match 1099s to Social Security Numbers, so if Sarah doesn't report that $13,500 on her return, she'll almost certainly get a CP2000 notice (basically an automated "you forgot to report this income" letter). Her dad's promise to "take care of the taxes" doesn't change the fact that the income is tied to her SSN. Even if he somehow managed to pay taxes on it through his own return, the IRS systems would still be looking for that income on Sarah's return. The Schedule C approach mentioned by Carmen is probably the most practical solution at this point - Sarah reports the income, then deducts the full amount as payments to her father for contract services. This way the IRS sees the income reported under the correct SSN, but the tax burden effectively passes to the person who actually earned it. Just make sure there's proper documentation of this arrangement in case of questions later. And definitely learn from this situation - sharing gig accounts creates way more problems than it's worth!

When I got a CP80 last year, I also found out that sometimes the IRS cashes your check but your return gets routed to a different processing center because of something unusual on it (in my case it was claiming a special tax credit). Could explain why they have your payment but not your return.

This exact thing happened to my neighbor last year! The CP80 notice can be really scary but it's usually just a processing mix-up. Here's what worked for her: She called her bank and got a copy of the front and back of the cashed check - the back showed it was endorsed by the IRS Treasury, which proved they definitely received her payment. Then she made copies of her entire tax return and wrote a cover letter explaining the situation. The key thing is to respond quickly to the CP80 notice. Don't wait thinking it will resolve itself. Include: - Copy of your complete tax return (mark it "DUPLICATE - CP80 RESPONSE") - Copy of the cashed check or bank statement - Brief letter explaining you filed and paid on time Send everything certified mail to the address on the CP80 notice. My neighbor got a letter back in about 6 weeks confirming everything was straightened out. The IRS even apologized for the confusion! Also, definitely keep trying to call the IRS. Early morning (around 7 AM) seems to have shorter wait times. You might get through eventually and they can sometimes resolve it over the phone if you have your documentation ready.

did you claim EIC or CTC? that usually makes it take longer tbh

3 weeks is definitely frustrating but not unusual this year. The "Still Being Processed" message without a tax topic code usually means they're doing a manual review of something on your return - could be income verification, credits, or just random quality control. I've seen people wait anywhere from 4-10 weeks with this message. Try checking your account transcript online if you can access it - that'll give you more specific info about what's happening behind the scenes.

Pro tip from someone who works in banking: SBTPG and other refund transfer companies make money by holding onto funds as long as possible while staying within their agreement terms. They're technically allowed to hold for up to 5 business days. Next year, avoid the whole SBTPG situation by paying your tax prep fees upfront instead of from your refund. Then you can direct deposit straight to any account without the middleman delay.

This is exactly why I switched to a different approach this year. I was tired of SBTPG holding my refund hostage every tax season. The uncertainty and delays just aren't worth it when you need the money for important expenses like your car repairs. Have you considered setting up direct deposit with your bank for next year instead? Even if it means paying prep fees upfront, at least you know exactly when your refund will hit your account once the IRS processes it. In the meantime, hang in there - based on what others are saying, it sounds like your funds should show up in the next day or two!

Has anyone actually been audited for claiming Section 1244 losses? I'm in a similar situation and wondering about the risk level if I go ahead with a conversion now.

I went through something very similar with a startup investment that went bad. The key issue with your situation is the timing - converting debt to equity after the company has already announced they're shutting down is going to be a huge red flag for the IRS. Section 1244 is designed for legitimate equity investments in small businesses, not for retroactive tax planning when a company fails. The IRS will look at whether you had a legitimate business reason for the conversion beyond just getting better tax treatment. Since the company has already announced closure, it's hard to argue there was any business purpose. Instead of the conversion route, you might want to look into claiming a bad debt deduction under Section 166. If you can demonstrate the loan is completely worthless (which sounds like your situation), you might be able to claim it as a short-term capital loss. While that's still subject to the $3,000 annual limitation, it's much safer from an audit perspective than trying to force a Section 1244 treatment through a last-minute conversion. I'd strongly recommend consulting with a tax professional before making any moves. The potential tax savings aren't worth the audit risk and penalties if the IRS views this as an abusive tax shelter.