This is a frustrating situation that unfortunately reflects a broader issue in tax preparation - some preparers prioritize their own risk management over proper compliance. As someone who's dealt with similar partnership tax issues, I'd strongly recommend getting a second opinion from another CPA before filing. The consensus from the tax professionals who've commented here is clear: UPEs belong on Schedule E according to IRS instructions. Your CPA's "red flag" theory doesn't hold up to scrutiny, and the former IRS agent's perspective confirms that following the instructions correctly actually reduces your audit risk. I'd suggest asking your CPA to provide written documentation of the specific IRS guidance that supports putting UPEs on Schedule C. If he can't (and he likely can't because it doesn't exist), that should tell you everything you need to know about his position. Don't let yourself be bullied into filing a return you're not comfortable with. You have legitimate concerns about compliance, and any good CPA should be willing to work with you to address them rather than dismissing your questions. The fact that he's "flat-out refused" to follow IRS instructions is particularly concerning.

As a tax professional who's seen this exact scenario play out many times, I want to echo what others have said - your instincts are absolutely correct here. UPEs should be reported on Schedule E, and your CPA's refusal to provide clear documentation supporting his Schedule C position is a major red flag. What's particularly troubling is his claim that Schedule E reporting creates "immediate scrutiny." This is simply not supported by any IRS guidance or data. If anything, the mismatch between K-1 partnership items and Schedule C business expenses is more likely to trigger questions during processing. I'd recommend giving your CPA one final opportunity to provide written IRS authority supporting his position. Ask specifically for the regulation, revenue ruling, or other official guidance that says UPEs should go on Schedule C instead of Schedule E. When he inevitably can't provide this (because it doesn't exist), you'll have your answer about whether to continue working with him. Your concerns about signing a return that contradicts IRS instructions are completely valid. Don't let anyone pressure you into filing something you're not comfortable with - especially when multiple professionals here have confirmed your understanding is correct.

I got hit with this last year and found that some of my eBay income was reported TWICE - once on 1099-K from eBay and a separate 1099-NEC from PayPal! Make sure you check if you're getting multiple forms for the same income and don't report it twice.

This is such a common confusion! I went through the exact same thing last year. The key thing to remember is that the 1099-K reporting threshold and your actual tax liability are completely separate issues. You're absolutely right that you only made $4,100 in actual profit, and that's what matters for your taxes. The $6,700 gross amount on the 1099-K is just what eBay has to report to the IRS - it doesn't mean you owe taxes on that full amount. When you file, you'll report the $6,700 as income but then deduct all your legitimate expenses (eBay fees, shipping, PayPal fees, cost of items if you have records, etc.) to get down to your actual $4,100 profit. You'll only pay taxes on that net amount. Also, keep in mind there's no minimum threshold for owing taxes on business income - even if you made $100 profit, you'd technically owe taxes on it. The reporting thresholds are just about when platforms have to send you (and the IRS) the 1099 forms. Make sure to keep good records of all those expenses you mentioned - eBay's transaction history is actually pretty helpful for this!

Quick warning to everyone filling out Form 8863 - make sure your school is eligible! My community college didn't qualify because they weren't participating in federal student aid programs. Wasted hours trying to claim AOTC before figuring this out.

I've been following this thread and wanted to share my experience as someone who went through similar Form 8863 confusion last year. The calculation error you described (getting 2,500,000) is actually really common - I made the exact same mistake! What helped me was creating a simple worksheet. For the American Opportunity Credit, it's: - First $2,000 of qualified expenses = 100% credit = $2,000 - Next $2,000 of qualified expenses = 25% credit = $500 - Maximum total credit = $2,500 The tricky part is that some tax software asks for the percentage as a decimal (0.25) while others want it as a whole number (25). Always double-check which format your form or software expects. Also, since you mentioned being an independent student under 24 - that's perfectly fine for claiming the credit. The age restrictions mainly apply to students being claimed as dependents on someone else's return. As long as you meet the other requirements (enrolled at least half-time, haven't completed first 4 years of higher education, meet income limits), you should be good to go. Good luck with your amended 2023 return too - it's definitely worth going back to claim that credit!

Just to add some clarity on the cycle codes - the format is YYYYWWDD where YYYY is the year, WW is the week number, and DD is the day. So your 20250505 means 2025, week 5, day 5 (Friday). This helps you track which batch your return was processed in. The negative amounts are definitely refunds coming your way - congrats on that $2,934 total! The "AS ADJUSTED" notation usually means the IRS made some corrections to your original filing, which could be anything from fixing a math error to applying additional credits you missed. Keep checking your account transcript for deposit dates!

Quick tip for everyone trying to decode these transcripts - the IRS actually has a master list of all transaction codes and cycle meanings on their website under "Understanding Your IRS Notice or Letter." But honestly, it's buried pretty deep in their site and written in government-speak. The cycle 20250505 that everyone's discussing is pretty standard - it just means your return went through normal processing in early February. The key thing to watch for is if you see any codes like 971, 570, or 424 which can indicate holds or additional review needed. Your transcript looks clean though - just the standard processing and refund codes!

This is incredibly helpful information from everyone! I'm relieved to see such consistent timelines - it looks like 4-6 weeks is pretty standard across the board. I'm particularly grateful for the tip about checking the tax transcript for the specific codes (841 for rejection, 846 for check issuance). That's way more useful than just refreshing the Where's My Refund tool every day! @Aurora St.Pierre - your timeline is almost identical to what I'm expecting, and the post-divorce account closure situation is exactly what I'm dealing with. I'll definitely call to verify my address since I did move during the divorce proceedings. Better to spend an hour on hold now than wait an extra month for a check to go to the wrong address. Thanks everyone for sharing your experiences - this community is so much more helpful than the IRS website's vague "allow additional time" language!

Just wanted to chime in as someone who's been through this process twice in the past few years. The 4-6 week timeline everyone's mentioning is pretty accurate, but here are a few additional things that might help: 1. If you have access to your tax transcript (which you can get for free on IRS.gov), look for these specific codes: - TC846 with a "DD" indicator = original direct deposit - TC841 = direct deposit returned/rejected - TC846 with "C" indicator = paper check issued 2. The IRS typically batches these rejected refund reissues, so your check might come faster if you're lucky enough to get into an earlier batch cycle. 3. One thing I learned the hard way: if you've recently moved OR changed banks, definitely call to verify both your mailing address AND remove the old direct deposit info from your account. Even though you can't use that bank anymore, having outdated info in their system can sometimes cause additional processing delays. The whole process is frustrating but fairly predictable once you know what to expect. Hang in there - your check will definitely arrive, it's just a matter of patience at this point!