Anyone else notice the IRS has been taking longer to process CAA-submitted W7 applications lately? Last year I was telling clients 4-6 weeks, but now I'm seeing 8-10 weeks minimum.

Thanks for bringing up this processing time issue - I've definitely noticed the same trend. I'm also a newer CAA (about 8 months now) and I've been tracking my application timelines. My first few submissions in September/October were processed in about 5-6 weeks, but everything I've submitted since January has been taking 9-12 weeks. I think part of the issue is that the IRS is still catching up from the pandemic backlog, plus they've had budget constraints affecting staffing levels. What I've started doing is being very upfront with clients about current processing times and explaining that while CAA applications don't get lost in the mail like regular submissions can, the review process itself is just taking longer right now. I also make sure to emphasize the other benefits - like not having to mail original documents and generally having fewer rejections due to documentation issues since we verify everything upfront. It's not ideal, but at least clients appreciate the transparency about realistic timelines.

Don't forget to consider state tax implications too! My cousin's beach house in Florida was destroyed in a hurricane, and while he handled the federal taxes correctly, he completely missed some state-specific requirements for reporting the insurance proceeds. Some states follow federal rules for casualty losses and involuntary conversions, but others have their own forms and schedules. Might be worth checking with a local tax professional who knows your state's requirements.

Just wanted to add one more thing that might help - make sure you keep detailed records of ALL expenses related to the fire and cleanup, even if they seem minor. I had a similar situation with a rental property fire and my tax preparer was able to deduct things like boarding up costs, debris removal, and even some of the storage fees for salvaged items. Also, if you had any personal property in the rental (appliances, furniture you provided to tenants), those might qualify for separate casualty loss treatment on Schedule A if they weren't fully reimbursed by insurance. It's easy to overlook these smaller items when you're focused on the big picture of the building and land. The timing issue you're dealing with is actually pretty common with insurance claims - they love to drag things out across tax years. Just make sure you're consistent in how you report the basis calculations between your 2024 and 2025 returns so you don't accidentally double-count anything.

Anyone else think its crazy we cant update banking info in 2025? Like hello IRS get with the times 🙄

Pro tip: call the IRS at 1-800-829-1040 and ask them to put a "trace" on your refund if it's been more than 21 days since you filed. They can sometimes expedite the paper check process or give you a better timeline. Also, definitely check that your address is correct in your IRS online account - I've seen people wait months for checks that went to old addresses!

I went through this exact same situation last year with about $25 in stock profits. After reading through all the comments here, I decided to call the IRS directly (yes, it took forever to get through). The agent told me something that might help clarify things for everyone: The key isn't the profit amount - it's whether your broker reported the cost basis to the IRS on your 1099-B. Look at your 1099-B form and check if there's basis information included. If it shows "basis reported to IRS" or has the cost basis filled in, then the IRS already has all the information they need and you likely don't need Form 8453. However, if your 1099-B shows the sale proceeds but NOT the cost basis (common with older accounts or certain types of trades), then yes, you need to send Form 8453 with documentation regardless of the tiny profit amount. For my $25 situation, it turned out my broker HAD reported the basis, so I didn't need to send anything extra. Check your 1099-B first before assuming you need to mail anything!

This is really helpful information from everyone! I'm dealing with a similar situation but with crypto trades instead of stocks. Made about $45 in profits from some Bitcoin trades last year and my tax software is also telling me I need Form 8453. From what I'm reading here, it sounds like the key is whether the exchanges reported my cost basis to the IRS. Most crypto exchanges don't provide 1099-B forms like stock brokers do - they usually just give you a 1099-K or their own transaction summary. Does anyone know if the same "basis reported to IRS" rule applies to cryptocurrency transactions, or do crypto trades automatically require the Form 8453 documentation regardless of the amount? I'm trying to figure out if I can avoid mailing in 20+ pages of crypto transaction records for such a small gain.

Does anyone know if this works the same way for multiple attorneys? I had both a main attorney and a specialized employment attorney that my main attorney brought in. The fee split between them was complicated but came to about 40% total.

I went through this exact situation two years ago with an employment discrimination settlement. One thing I wish someone had told me earlier is to also keep detailed records of any costs beyond just the attorney fees - things like filing fees, expert witness costs, or court reporter fees if your case had depositions. These additional litigation costs can also be deductible as part of your case expenses. My attorney's final statement broke down not just their fee but also $3,200 in other case costs that I was able to deduct. Make sure when you request that detailed letter from your attorney that you ask them to itemize ALL costs related to your case, not just their legal fees. Also, if any part of your settlement was specifically for punitive damages, that portion might have different tax treatment, so make sure your settlement agreement clearly states what each portion of the payment covers.