Has anyone successfully gotten the penalties removed in a CP23 situation? I had a similar issue last year and got the payments sorted out, but they wouldn't remove the failure-to-pay penalty even though it was their mistake.

I went through this exact same CP23 nightmare two years ago! The IRS somehow "lost" three of my quarterly estimated payments despite having valid EFTPS confirmation numbers. What saved me was being extremely persistent and documenting everything. Here's what worked: I sent a certified letter to the IRS address on the CP23 notice with copies of ALL my EFTPS confirmations, bank statements showing the withdrawals, and a detailed timeline of when each payment was made. I also included a formal request for penalty and interest abatement citing "reasonable cause" since the error was entirely on their end. The key is to be very specific about the dates, amounts, and confirmation numbers. Don't just say "I made payments" - give them every single detail they need to trace the payments in their system. It took about 8 weeks, but they eventually found all my payments and reversed everything including penalties and interest. Also, if you have to call again, ask to speak with a "payment tracer specialist" - they have more authority to research misapplied payments than regular customer service reps. Good luck, and don't give up! You're definitely not at fault here.

I've been following this thread closely because I'm dealing with a very similar situation. The IRS processing delays are absolutely ridiculous right now - it's like they're operating with a skeleton crew while drowning in paperwork. One thing that hasn't been mentioned yet is that you might want to contact the Taxpayer Advocate Service (TAS) if this drags on much longer. They're an independent organization within the IRS that helps taxpayers resolve problems when normal channels aren't working. Since you've already been waiting 13-14 weeks for a payment to process (well beyond their stated 12-week timeframe), and you're now receiving incorrect notices, this could qualify as a "significant hardship." You can reach them at 1-877-777-4778 or submit Form 911. They have more authority to cut through the bureaucratic mess and actually get things moving. I had to use them last year for a similar issue and they were able to resolve in about 3 weeks what the regular IRS couldn't fix in 6 months. The key is documenting everything - which it sounds like you're already doing. Keep records of all your calls, the CP23 notice, proof of payment, and any written correspondence. TAS will want to see that you've made reasonable attempts to resolve this through normal channels first. Hang in there - this is unfortunately becoming the norm rather than the exception with IRS processing right now.

I'm going through almost the exact same situation right now! Made my quarterly payment back in January and it's been radio silence ever since. The IRS phone reps keep telling me "it's in the system" but nothing shows up online or on my transcripts. What's really concerning me after reading through this thread is that even when people get through to agents who can "see" the payment, it's still taking months to actually process and apply to accounts. I'm worried I'm going to get hit with a similar notice soon. The advice about the Taxpayer Advocate Service is gold - I had no idea that was even an option. Definitely going to keep that in my back pocket if this drags on much longer. The 877-777-4778 number and Form 911 could be a lifesaver. Has anyone tried making their response to these notices via certified mail? I'm wondering if that helps create a stronger paper trail or if regular mail is sufficient for the 60-day response window.

Don't forget to check if she needs to pay state income tax in the state where she's working! Federal exempt status doesn't automatically mean state exempt. Some states have much lower thresholds for taxation.

Great question! I went through this exact situation with my college-age son last year. The key thing to remember is that being claimed as a dependent doesn't automatically disqualify your daughter from claiming exempt status on her W-4 - it just changes how her standard deduction is calculated. As others have mentioned, for dependents in 2025, the standard deduction is the greater of $1,250 or earned income plus $400 (but capped at the regular standard deduction of $14,600). With her expected $6,700 in earnings, her standard deduction would be $7,100. One additional tip: make sure she keeps good records of her actual earnings throughout the summer. If she ends up making significantly more than expected and goes over that $7,100 threshold, she might owe some tax even though she claimed exempt. In that case, she'd need to make quarterly estimated payments or face potential penalties. Also, don't forget about FICA taxes (Social Security and Medicare) - those will still be withheld from her paychecks regardless of her exempt status, since exempt only applies to federal income tax withholding.

Just want to add that if the person absolutely refuses to provide their SSN and you still pay them anyway, YOUR ORGANIZATION will be responsible for the backup withholding (24% of what you paid them). And the IRS can assess penalties for failure to obtain a W-9!!! I learned this the hard way with our arts nonprofit. We were fined $250 per missing W-9 during an audit. Plus we had to pay the backup withholding we should have collected. Totaly wiped out our small reserve fund.

Based on my experience with our local community center's nonprofit, I'd strongly recommend being very clear with your media person about why you need their SSN and what protections are in place. Many people don't realize that the W-9 form they're completing stays with your organization - it's not sent to the IRS. You might also explain that this is a standard business practice for any organization paying contractors over $600, not just nonprofits. Sometimes framing it as "this is what every business does" rather than "the IRS requires this" makes people more comfortable. If they're still hesitant, you could offer to show them your organization's data security policies or explain how you store and protect sensitive information. We found that transparency about our processes helped reluctant contractors feel more confident about sharing their information. One last suggestion - if the promotional work might extend beyond this year, make sure you're tracking payments by calendar year, not by project. You could potentially split the work across two calendar years to stay under the $600 threshold if that makes sense for your timeline.

Has anyone had the IRS make the same mistake again after filing the 941-X? We had a similar situation in 2022 and even after submitting the correction, they made the exact same data entry error again the following quarter. wondering if this is a systemic issue with certain employer accounts.

This exact same thing happened to my business last year! The IRS transcribed my Q3 941 wages as $45,000 instead of $450,000 - apparently someone missed a zero during data entry. Got a CP134R refund for over $12,000 that I knew was wrong. What made it even more frustrating was that I e-filed through my payroll software, so there shouldn't have been any manual transcription errors at all. Turns out their system had a glitch that corrupted some electronically filed returns during processing. The 941-X process you're going through is correct, but make sure to explicitly state in Part 4 that this is correcting an IRS processing error, not your filing error. I also recommend calling the Practitioner Priority Service line (if you have a tax pro) since they tend to be more knowledgeable about these systematic processing issues. Regular customer service agents often don't understand how these transcription errors happen in the first place. Keep detailed records of everything - this type of error sometimes repeats itself in their system even after correction.