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.

22 One thing nobody has mentioned yet is that your friend might have his own tax issues here. If he's giving you $120k in cash and specifically saying he doesn't want the IRS to know, where did that cash come from? If he's trying to avoid reporting requirements, he might be putting you in a bad position too. You might want to be careful about getting involved in a situation where someone's explicitly trying to hide money from the IRS. Just saying.

19 Have you considered just breaking the CD? Usually the penalty is just a few months of interest. Might be worth it to avoid all these potential issues with large cash deposits and loans that are specifically designed to avoid IRS reporting.

I'd suggest getting a formal appraisal before making the final decision between selling vs. donating. If the dress truly has a fair market value of $2,500-3,000 (which seems reasonable for a $5,400 dress in perfect condition), and if your fiancée has other itemizable deductions that would push her over the standard deduction threshold, the tax benefit could be meaningful. But here's something to consider - if she's facing $13k in capital gains, that puts her in a higher tax bracket where charitable deductions provide more benefit. A $2,500 deduction could save her $550-625 in taxes (22-25% bracket) versus maybe getting $1,000-1,500 from a sale after months of trying. Also, don't forget about state tax benefits if your state allows charitable deductions. The combined federal and state tax savings might actually exceed what you could realistically get from selling it at this point. One more tip: if you do donate, consider doing it early in the tax year so you have time to make additional charitable donations if needed to maximize the itemized deduction benefit.

I've been through a similar situation with high-value donations and capital gains, so I wanted to share a few practical insights that might help. Regarding the appraisal cost - yes, you typically pay upfront (usually $150-300 for clothing items), but this cost is also tax-deductible as a miscellaneous expense related to tax preparation. So it doesn't completely eat into your savings. For timing, you're right that it just needs to happen before December 31st for that tax year. However, I mentioned doing it early because if the donation alone doesn't get you over the standard deduction threshold, you have time to plan other charitable giving throughout the year to maximize the benefit. One strategy I used: I bunched multiple years' worth of charitable giving into one tax year (donated items I was planning to give away over 2-3 years all at once). This pushed me well over the standard deduction threshold, making all the donations much more valuable tax-wise. Also, don't overlook that if she's in a high tax bracket due to capital gains, she might benefit from the Net Investment Income Tax (3.8%) reduction as well, which could add another layer of savings on top of the regular income tax benefit. The math really does favor donation in higher tax brackets, especially when you factor in both federal and state benefits.

Anyone know how this works if your company went through an acquisition? My RSUs converted to acquiring company stock with a weird conversion ratio and now I have no idea how to calculate my basis.

Great question! You're right to be confused - this is one of the most misunderstood aspects of RSU taxation. The correct answer is that your cost basis is $1,960 ($35 × 56 shares), not $2,800. Here's the key insight: when your RSUs vested, you received $2,800 in taxable income (80 shares × $35). Your employer withheld 24 shares worth $840 to pay the income taxes on that $2,800 - think of this as equivalent to withholding cash from your paycheck for taxes. The 56 shares you actually received each have a cost basis of $35 (the fair market value on vesting day). You already paid income tax on the full $2,800 value through the share withholding mechanism, so when you eventually sell these 56 shares, you'll only owe capital gains tax on any appreciation above $35 per share. This isn't double taxation - it's actually protecting you from it. The $840 worth of shares that were withheld served as your tax payment, and the remaining shares start with a "clean" basis for capital gains purposes. If the basis were $2,800 for only 56 shares, you'd effectively be getting an artificial step-up that the IRS doesn't allow.