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I went through this exact same situation last year! The "Action Required" status with Tax Topic 152 is actually pretty routine - it usually means they need to verify something on your return before processing your refund. In my case, it was because we had a significant change in our income compared to the previous year, which triggered their automated review system. The waiting for the letter is definitely the most frustrating part, but once you get it, the instructions are usually pretty straightforward. Mine took about 10 days to arrive (not the full 2-3 weeks they estimated), and they just needed copies of our W-2s and a signed statement confirming our filing status. One thing that really helped me was pulling my tax transcript from the IRS website to see if there were any transaction codes that might give a hint about what they're looking for. The codes can be confusing, but sometimes you can piece together what triggered the review. Don't stress too much about it - in most cases, as long as you respond promptly with the requested documentation, you'll get your full refund. It just adds a few extra weeks to the process. The key is to respond exactly as they ask and keep copies of everything you send them.
Thanks for sharing your experience! That's really helpful to know it might arrive sooner than the 2-3 weeks they estimate. We did have a pretty big income change this year too (got a new job with higher pay), so that's probably what triggered it. I'm going to try pulling our transcript like you suggested to see if I can figure out what they're looking at. Really appreciate the reassurance that it's usually straightforward once you get the letter!
I've been through this exact situation twice in the past few years, and while it's nerve-wracking, it's usually not as scary as it seems! The "Action Required" with Tax Topic 152 typically means they need to verify something before releasing your refund - not that there's necessarily anything wrong. In my experience, the most common reasons are: - Identity verification (especially if you moved or changed jobs) - Verifying dependent information - Confirming income reported on your return matches what they have on file - Double-checking eligibility for credits you claimed The good news is that once you respond to their letter with the requested information, the process usually moves pretty quickly. My first time took about 6 weeks total from getting the letter to receiving the refund. The second time was only about 3 weeks. A few tips that helped me: - Respond as soon as you get the letter - don't wait - Send exactly what they ask for, no more, no less - Make copies of everything before you send it - Use certified mail so you have proof they received it Try not to stress too much while waiting for the letter. In most cases, it's just routine verification and you'll get your full refund once you provide what they need!
This is such great advice! I'm definitely saving this post for reference. The tip about using certified mail is really smart - I never would have thought of that but it makes total sense to have proof they received your response. It's reassuring to hear that 3-6 weeks is typical once you respond. I was imagining this dragging on for months! Thanks for breaking down the common reasons too - helps put things in perspective that it's likely just routine verification rather than anything serious.
Since you're renting half of a duplex where you live in the other half, you should look into whether this qualifies as a "dwelling unit used as a home" under IRS rules. This classification affects how expenses are allocated and deducted. When you use a dwelling unit for both personal and rental purposes, expenses have to be allocated based on time or space. For a duplex where half is your residence and half is Airbnb, you'd usually allocate based on square footage. So mortgage interest, property taxes, utilities, internet, etc. would be split accordingly. Also, if you're actively managing the property (screening guests, handling turnovers, etc.), this could potentially be considered "material participation" which has different tax implications than passive rental income.
So if I understand right, for a 50/50 split duplex, I could deduct 50% of common expenses for the business side? What about stuff that's only for the rental side like furniture, cleaning between guests, etc? Are those 100% deductible?
One thing to consider that hasn't been mentioned yet - since you're doing short-term rentals (Airbnb), you'll likely need to deal with local occupancy taxes and business licensing requirements that vary significantly by city and county. Many jurisdictions require separate business licenses for short-term rentals, and some have caps on the number of days you can rent or require special permits. For the LLC timing question, I'd actually recommend getting it set up ASAP, not just for liability protection but because many local licensing authorities want to see a registered business entity when you apply for STR permits. Having your LLC established first makes the licensing process smoother. Also, don't forget about sales tax implications - in many states, short-term rentals under 30 days are subject to sales tax collection and remittance, which is different from traditional long-term rental properties. The LLC can help keep these tax obligations separate from your personal finances and make compliance easier to track.
Great point about the local requirements! I'm just getting started with this whole process and hadn't even thought about occupancy taxes or business licenses. Do you know if there's a good way to research what specific requirements apply in my area? I'm worried about accidentally operating without the right permits and getting hit with fines or having to shut down before I even get going. Also, when you mention sales tax collection - does that mean I'd need to charge guests extra tax on top of what Airbnb already collects, or does Airbnb handle that automatically in most places?
I've been following this thread closely because I'm dealing with a very similar situation, and I wanted to add some important information that might help everyone here. I just got off the phone with an IRS agent (after using that Claimyr service someone mentioned - it actually works!), and she explained something crucial about these 105c letters that I hadn't seen mentioned yet. According to the agent, there's been a systematic issue with their computer system flagging legitimate refund claims as expired due to a glitch in how it calculates dates when returns are filed close to the deadline. She said they've been getting a lot of appeals on 105c letters from 2018-2019 returns that were actually filed on time. The key thing she told me is that when you file your Form 12203 appeal, you should specifically request that they pull your "master file transcript" (not just the regular account transcript) because it shows more detailed processing information including the exact time stamps of when documents were received versus processed. She also mentioned that if your regular transcript shows the correct received date (like Sofia's does), the appeals office has been instructing agents to expedite these cases because it's clear evidence of a system error rather than a legitimate late filing. This gives me a lot more confidence that these appeals will be successful for those of us with proper documentation. It sounds like the IRS is aware this is their mistake, not ours.
This is incredibly valuable information, Paolo! Thank you for sharing what you learned from speaking directly with an IRS agent. The fact that there's a known systematic issue with their computer system flagging legitimate claims really explains why so many people are suddenly getting these 105c letters for returns that were clearly filed on time. Your point about requesting the "master file transcript" specifically is something I hadn't heard before - that could be the key difference in getting these appeals resolved quickly. It makes sense that more detailed timestamps would show exactly when the IRS received documents versus when they got around to processing them. It's both frustrating and relieving to know this is a widespread system error on their end. Frustrating because it's causing so much stress for taxpayers who did everything right, but relieving because it means there's a clear path to getting it fixed. I'm definitely going to mention this systematic issue and specifically request the master file transcript when I file my appeal. Did the agent give you any sense of how long the expedited process takes for cases with clear documentation like this?
Reading through all these experiences is both terrifying and reassuring! I'm a newcomer here but dealing with the exact same nightmare - just received a 105c letter for my 2019 return that I know I filed on time. What's really helpful is seeing the pattern emerge from everyone's stories. It seems like there are three key pieces of evidence that are making these appeals successful: 1. The IRS transcript showing the correct received date (contradicting their own 105c letter) 2. Mailing receipts/certified mail proof showing timely filing 3. The systematic computer glitch Paolo mentioned that's been flagging legitimate claims I'm going to request both my regular transcript AND the master file transcript Paolo mentioned, since that seems to have the more detailed timestamps. The fact that IRS agents are aware this is a system error and are expediting these cases gives me hope. One question for those who've been through the appeals process - when you cite IRC Section 7502 (timely mailed = timely filed) and IRC Section 6511(a) in your Form 12203, did you include the actual text of those code sections or just reference them? I want to make sure I'm being thorough but not overwhelming the appeals officer with too much information. Thank you everyone for sharing your experiences and advice. This thread has been a lifeline during what was starting to feel like a hopeless situation!
This might sound strange, but check if they're using calendar days or business days in their internal systems. I had an issue where the IRS website listed a deadline as May 17, but they were actually counting business days, not calendar days because of a weekend and holiday adjustment. Their system rejected my filing even though I met the published deadline. I had to talk to three different IRS agents before finding one who understood the discrepancy. The whole situation was infuriating, but they eventually corrected it.
Good point! The IRS sometimes shifts deadlines and doesn't clearly communicate whether they're talking about the filing date or processing date. In tax law, there are actually different types of deadlines and "timely filing" rules depending on what section of the code applies.
I work as a tax preparer and see this exact scenario frequently. The confusion often comes from the IRS having different deadline rules for different types of filings, but not clearly distinguishing them on their main website pages. For 2018 tax returns filed to claim refunds, the actual deadline was typically 3 years from the original due date (April 15, 2019), which would make it April 15, 2022 - not April 18th. The April 18th date you saw was likely for regular 2021 tax filings (since April 15, 2022 fell on a Friday and Patriots Day was observed). The IRS website sometimes displays multiple deadline dates on the same page without clearly separating which applies to what type of filing. This creates exactly the situation you're experiencing. Since you have screenshots proving the website displayed April 18th as the deadline for your specific situation, and they confirmed receipt on that date, you definitely have grounds for appeal. File Form 843 and include all your documentation - the website screenshots are crucial evidence that their own published guidance led to this confusion.
This is incredibly helpful - I think you've identified exactly what happened! Looking back at the screenshots I took, the page did have multiple dates listed and I probably misread which one applied to my situation. The fact that a tax professional has seen this exact confusion before makes me feel less crazy about the whole thing. I'm definitely going to file the Form 843 with all my documentation like you suggested. Do you think I should mention in my appeal that their website layout contributed to the confusion, or just focus on the fact that I reasonably relied on what appeared to be the published deadline for my situation? I want to make sure I frame this correctly to have the best chance of success.
Zara Rashid
Just want to echo what others have said - this is totally normal! I got the exact same letter last month when I was dealing with FAFSA stuff. The key thing to remember is that the IRS systems can be slow to update, especially during busy filing season. When your school requested the verification on Feb 16th, your return probably just hadn't been fully processed yet even if you filed weeks earlier. I called the 800 number just to double-check and the rep confirmed it was just a timing issue - nothing to worry about. Keep that tracking ID handy though, it'll be useful if you need to reference this letter later for your financial aid office or if you call the IRS again. The whole thing resolved itself once my return finished processing a few weeks later.
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Philip Cowan
ā¢Thanks for sharing your experience! It's really helpful to hear from someone who went through the exact same thing. I was definitely overthinking it - the timing explanation makes perfect sense now. I'll definitely keep that tracking ID safe and might give them a call just for my own peace of mind, but sounds like this is just standard FAFSA paperwork timing. Really appreciate everyone taking the time to explain what's going on!
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Dmitry Smirnov
I've dealt with this exact situation before! This letter is completely normal and nothing to worry about. The IRS Memphis center sends these verification of non-filing letters all the time, especially during FAFSA season. The timing here is key - someone (likely your school's financial aid office) requested verification on February 16th that you hadn't filed your 2024 return yet. At that specific moment, the IRS system showed no processed return for you, which could mean either you hadn't filed yet OR your return was still being processed (which can take several weeks even after e-filing). Since you mentioned applying for financial aid recently, this is almost certainly related to your FAFSA application. Schools routinely request these verification letters to confirm students' tax filing status for aid calculations. It's just standard paperwork - not identity theft or anything scary! If you've already filed your 2024 return, just provide that to your financial aid office instead of this letter. The tracking ID on the letter will be helpful if you need to reference this with the IRS later. You can always call that 800 number for confirmation, but this is definitely routine FAFSA documentation.
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Aiden O'Connor
ā¢This is exactly what I needed to hear! I was getting really anxious about this letter but your explanation makes it crystal clear. The timing with my FAFSA application makes perfect sense now - I submitted it right around when they would have requested this verification. Really appreciate you and everyone else taking the time to walk through this step by step. Feeling so much better about the whole situation now!
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