Quick question - has anyone had success calling their state tax department about duplicate W-2s? My employer made mistakes on my state withholding and I'm wondering if I should talk to the state first before the IRS?

I went through something very similar last year when my employer's payroll system got updated mid-year. What you're describing sounds like a classic state allocation error - your employer probably reported your wages to the wrong state initially (Alabama) and then issued the second W-2 to correct the state reporting to Georgia. The key thing to understand is that you should NOT file with both W-2s. Contact your payroll department immediately and ask them to issue a single corrected W-2 that shows your full federal wages in Box 1 and the correct Georgia state information. Most payroll departments are familiar with this issue and can turn around a corrected form pretty quickly. In the meantime, definitely don't try to force the incomplete W-2 into TurboTax - the IRS computers will flag the mismatch between what your employer reported and what you filed. Better to wait a week or two for the proper correction than deal with IRS notices later.

As someone who works in tax compliance, I want to emphasize a few critical points that haven't been fully covered yet: First, timing matters significantly. You mentioned your son wants to transfer this next month - make sure he understands that large international transfers can take several days to process and may face additional scrutiny from both Thai and US banking authorities. Plan accordingly. Second, document EVERYTHING. Keep records of the relationship between you and your son, the gift letter, all transfer documentation, and any correspondence about the gift. The IRS may request this documentation years later during an audit. Third, consider the gift tax implications on your son's end in Thailand. While you won't owe US tax on receiving the gift, Thailand may have its own rules about large monetary gifts or transfers abroad that your son needs to comply with. Finally, given the substantial amount ($650,000), I'd strongly recommend getting a second opinion from another international tax professional even after you hire the first one. The peace of mind is worth the additional consultation fee when dealing with potential penalties that could reach tens of thousands of dollars for filing errors.

I want to add some perspective as someone who received a large foreign gift two years ago ($350k from my grandmother in the UK). The advice here is all solid, but I want to emphasize how important it is to get ahead of this process early. When I received my gift, I made the mistake of waiting until tax season to deal with Form 3520. By then, I was stressed and rushed, which led to some errors that required amendments. Start looking for that international tax professional NOW, not in March when everyone is swamped. Also, regarding your son in Thailand - have him get a letter from his bank confirming the source of the funds and that it's a legitimate transfer. Some US banks will want to see this to satisfy their anti-money laundering requirements. My UK bank provided something called a "source of funds declaration" that really helped smooth the process on the US side. One more thing - keep digital and physical copies of everything in multiple locations. I lost some paperwork in a computer crash and had to scramble to get duplicates from overseas, which was a nightmare. The IRS can ask for this documentation years later during audits, so treat it like you would any other important financial records. The good news is once you get through the reporting the first time, you'll know exactly what to expect if this ever happens again!

This has been an incredibly thorough discussion that covers most of the key issues with S-Corp inventory donations. As someone who works with S-Corps regularly, I wanted to add a few additional considerations that might be helpful: First, make sure to coordinate with your bookkeeper or accountant BEFORE making the donation to ensure your inventory tracking system can properly handle the transaction. You'll need to be able to clearly identify which specific inventory items were donated and their exact basis amounts. Second, consider the cash flow implications. While you get a tax deduction, you're also giving away inventory that could have been converted to cash through sales. Make sure this aligns with your business's cash flow needs, especially if you're in a seasonal business or facing any liquidity concerns. Finally, document everything extensively. Beyond the standard charitable acknowledgment letter, keep detailed records of the inventory donated (descriptions, quantities, basis calculations), photos of the items, and any communications with the charity. The IRS can be particularly scrutinous of large non-cash donations, and having comprehensive documentation will protect you if you're ever audited. The interplay between the COGS adjustment, pass-through taxation, and individual shareholder limitations makes this more complex than a simple cash donation, but it can still be very beneficial when done correctly. Just make sure to run all the numbers first and communicate clearly with all shareholders about the tax implications they'll see on their personal returns.

Great question about the photo documentation! The IRS doesn't explicitly require photos for inventory donations, but they're incredibly valuable for audit protection, especially for donations over $5,000. During an audit, the IRS may question the condition and actual value of donated items, and photos provide concrete evidence of what was donated and its condition at the time of donation. I learned this lesson when helping a client who got audited on a large inventory donation. The IRS agent specifically asked for visual proof that the donated items were in the condition claimed on the Form 8283. Without photos, it became a very difficult conversation about fair market value and whether the items were truly usable by the charity. Beyond audit protection, photos also help with your own record-keeping. When you're donating large quantities of varied inventory, it's easy to lose track of exactly what was included months later when you're preparing tax documents. One more practical tip: if you do take photos, make sure they clearly show any identifying marks, serial numbers, or model numbers that tie back to your inventory records. Generic photos of "miscellaneous items" aren't as useful as specific documentation that matches your basis calculations. The cash flow modeling you mentioned is crucial - I've seen S-Corps get excited about the tax benefits and donate inventory they actually needed to sell to meet operating expenses. Always run a cash flow projection that accounts for the lost sales revenue versus the tax savings at the shareholder level.

I'm going through the exact same thing right now! Got my CP05 notice last week and have been stressing about it ever since. It's so frustrating because like you, I filed a completely straightforward return in February and was expecting my refund by now. The waiting game is the worst part - 60 days feels like forever when you're counting on that money. I've been checking my transcript obsessively but nothing has changed since the 810 code appeared. From what I'm reading here, it sounds like most people do get their full refund eventually, which is reassuring. I guess we just have to be patient even though it's incredibly annoying. Thanks for sharing your experience - at least I know I'm not alone in this! Keep us updated on how it goes. Hopefully we'll both see some movement on our transcripts soon. 🤞

I'm in the exact same boat! Got my CP05 notice yesterday and have been spiraling ever since. Filed my return in early February with just W-2 income and standard deduction - nothing complicated at all. The 810 code showed up on my transcript about two weeks ago and I've been checking it daily hoping it would disappear. What's really frustrating is that I claimed the Child Tax Credit for my two kids, which I've done for years without any issues. Now I'm wondering if that's what triggered this "random" review. The timing couldn't be worse since I was planning to use my refund to catch up on some bills. Reading through all these responses is actually pretty reassuring though. It sounds like most people do eventually get their full refund, even if it takes the full 60 days. Still doesn't make the waiting any easier when you're living paycheck to paycheck and counting on that money. I guess I'll try to follow the advice here and stop checking my transcript every day. Maybe I'll set a weekly reminder instead. Thanks for posting this - it really helps to know other people are going through the same thing right now!

I'm wondering if it matters that the OP only made $13.5k as a substitute teacher? Isn't that below the filing threshold anyway? Maybe they wouldn't have owed taxes regardless of this fake business?

This is absolutely tax fraud, and you need to act quickly to protect yourself. The fact that the preparer was so casual about creating a fictional business shows this isn't their first time doing something like this - which is terrifying. Here's your immediate action plan: First, file Form 1040-X (amended return) to remove the fake business loss. Even if you end up owing some taxes, it's infinitely better than having fraudulent information on your return. Second, report this preparer using Form 14157 and consider contacting your state's tax preparer licensing board if they have one. The good news is that with only $13,500 in income, you're likely under the standard deduction anyway, so you probably won't owe much (if anything) once you remove the fake business. But don't wait - the longer fraudulent information stays on your return, the worse it looks if the IRS discovers it during an audit. Document everything - save copies of your original return, any communications with the preparer, and notes about what happened. This will help if you need to prove you weren't complicit in the fraud. The preparer's casual attitude about this suggests they've done it before and will do it again to other unsuspecting clients.