This is incredibly frustrating and you're definitely not alone! I've been dealing with something very similar - got hit with the 570/971 codes about 3 weeks ago and I'm still waiting for any kind of notice or explanation. Called the IRS multiple times and keep getting the same vague "120-day review" response with absolutely no specifics. What's really bothering me is how random these reviews seem this year. My return was super straightforward too - single W-2, standard deduction, same job I've had for years. Yet somehow I'm stuck in this limbo while friends with more complicated returns sailed through processing in weeks. One thing I learned from my multiple calls is that you can ask them to verify what address they have on file for you - apparently some people have missed important notices because of outdated addresses. Also, the representative mentioned that if they actually need documentation from you, that notice typically comes within the first 30 days after the 971 code appears. I know the waiting is brutal, especially when you're counting on that refund. I've started checking my transcript weekly instead of daily (per IRS recommendation) which has helped my sanity a bit. Hang in there - from what I've read, most people with legitimate returns do eventually get their full refund, even if it takes way longer than expected.

I'm going through the exact same nightmare right now! Got my 570/971 codes about 2.5 weeks ago and I'm completely new to dealing with IRS reviews. Like so many others here, my return is ridiculously simple - one W-2, standard deduction, nothing fancy at all. What's really getting to me is the complete lack of transparency. I've called twice now and both times got the same scripted "120-day review" response with zero explanation of what triggered it. The representatives are polite but basically useless when it comes to actual information. I'm a newcomer to this community but wow, reading through everyone's experiences here has been both reassuring (I'm definitely not alone in this!) and terrifying (some people are really waiting the full 4 months?). It seems like 2025 tax season has been particularly brutal for these mysterious reviews. One question for those who've been through this before - is there any benefit to calling back periodically, or should I just wait it out? I don't want to waste more hours on hold if they're just going to give me the same non-answers. Also definitely going to double-check my address is current with them after reading some of the horror stories here about notices going to old addresses. The financial stress is real when you're counting on that refund. Hoping we all get some movement soon! 🤞

I've been following this discussion and wanted to add something that might help other small partnership owners. The confusion around criterion #4 is super common, and I think part of the issue is that the IRS instructions use the term "reportable entity partner" without clearly defining it upfront. A "reportable entity partner" is basically a corporation, partnership, or other business entity that's already required to file its own Schedule M-3. So unless your LLC is owned by another company or partnership that files M-3 (like if a corporation bought into your business), you don't need to worry about this criterion. The key thing to remember is that individual people - even if they own 50% or more - are never considered "reportable entity partners." This rule is really targeting situations where large corporations or complex partnerships have ownership stakes in other businesses, not simple partnerships between individuals. For what it's worth, I've never seen a small two-person LLC partnership need to file Schedule M-3 unless they had some really unusual circumstances or grew to meet one of the first three criteria (assets/receipts thresholds).

This whole discussion has been incredibly helpful! I'm in a similar situation with my business partner and was getting completely overwhelmed by the Schedule M-3 requirements. What really clicked for me reading through all these responses is that the IRS is essentially asking "Is your small partnership owned by a big company that already has to deal with complex tax reporting?" rather than "Do you have partners with significant ownership percentages?" For those of us with simple two-person LLCs where we're both individuals, it sounds like we can breathe easy and stick with Schedule M-1. The language in the tax code definitely makes it sound scarier than it actually is for small partnerships! I appreciate everyone sharing their experiences - from the software recommendations to the tools for getting IRS clarification. It's reassuring to know that so many others have been in the same boat and figured it out successfully.

Has anyone run into this problem where they filed correctly but the IRS sided with the incorrect parent? My mom claimed me when I was 22, working full-time and living with roommates. I filed claiming myself and got a letter saying my return was rejected because someone else claimed me.

This is a really common situation that many young adults face when transitioning to financial independence. Based on your description, your mom should not be claiming you as a dependent this year. The key tests for dependency are pretty clear-cut: - Age test: You're 23 (almost 24), so you'd need to be a full-time student to qualify under the age requirement - Residency test: You live with your dad, not your mom - Support test: You support yourself financially through your full-time job The fact that you were previously on her health insurance doesn't matter now that you have your own coverage through work. Even when you were on her plan, that alone wouldn't have qualified you as her dependent if you failed the other tests. You should absolutely file your own taxes and claim yourself. Don't let her pressure you into filing incorrectly again. If she's already filed claiming you, the IRS will flag the discrepancy when you file your return. They'll send both of you letters asking for documentation to prove who can legitimately claim the exemption. Keep records of your employment, where you live, and how you support yourself - you'll need this if the IRS asks for proof. This situation might be uncomfortable with your mom, but filing correctly is important for your financial future.

Can someone explain if there's any difference in how Form 2555 should be filled out using TurboTax vs. H&R Block? I've been using TurboTax but it seems to be giving me weird results for my Housing Exclusion when I enter my Singapore housing expenses. I'm wondering if H&R Block handles Form 2555 better?

I've been through a similar situation with Form 2555 while working in South Korea, and I can confirm that TurboTax's interface for foreign income exclusions can be frustrating. Based on your circumstances, here are a few additional considerations: Since you left Japan on December 4th and your assignment was confirmed indefinite on October 18th, you're correct to only include the post-October 18th amounts for taxable fringe benefits. However, double-check that your 297 days calculation is accurate - make sure you're counting complete 24-hour periods outside the US, not partial days. For Line 21c (the rental car), if the vehicle was available for both business and personal use, you should include the full amount after October 18th ($1,700) as taxable income. The IRS generally treats employer-provided vehicles as taxable fringe benefits when the assignment exceeds one year. One thing I'd recommend: consider filing Form 2555 by paper rather than through TurboTax if the software keeps giving you strange results. The IRS processors are quite familiar with these forms, and sometimes the manual approach is more straightforward than fighting with software that doesn't handle complex expat situations well. Also, make sure you have documentation from your employer about the exact date your assignment status changed to indefinite. This will be crucial if the IRS has questions about your fringe benefit calculations.

Has anyone used TurboTax to handle the reporting for this kind of transaction? I'm dealing with this exact situation but not sure if regular tax software can handle it properly or if I need to hire a CPA.

I'd strongly recommend getting professional help for this type of transaction. While the strategy can work, there are several critical considerations that need to be handled correctly: 1. **Business Purpose Documentation**: The IRS will scrutinize whether your S-Corp has legitimate business purposes beyond just holding your former residence. You'll need to document these purposes clearly. 2. **Fair Market Value**: You must sell at true FMV - get a professional appraisal. The IRS can challenge related-party transactions if the price seems artificial. 3. **Corporate Formalities**: Your S-Corp needs to operate as a real business entity - separate bank accounts, proper meetings/resolutions, market-rate rent if you continue living there, etc. 4. **Mortgage Complications**: As others mentioned, most residential mortgages have due-on-sale clauses. You'll likely need commercial financing for the S-Corp. 5. **State-Specific Issues**: Property tax reassessment, transfer taxes, and state-level reporting requirements vary significantly by location. The potential benefits can be substantial if you have significant appreciation, but the compliance requirements are complex. A qualified CPA experienced with real estate transactions and S-Corp structures is essential - don't try to navigate this alone with tax software.