Pro tip: calling early morning right when they open has worked best for me to actually get through to someone

I went through this exact same situation last year. The 570/971 combo is frustrating but pretty common. In my case, it was because the IRS needed to verify my identity since I had moved and changed jobs. The letter took about 3 weeks to arrive and once I responded with the requested documents, my refund was released within 10 days. Hang in there - I know it's stressful when you're counting on that money for bills. Keep checking your mail daily and your transcript for any updates.

Has anyone had experience dealing with functional currency elections under Section 985 in connection with this issue? Wondering if making that election would simplify the filing process for future years even though it wouldn't help with the past unfiled returns.

I've dealt with this exact situation multiple times with foreign clients who had unfiled 1120F returns. The M-1 adjustment approach is definitely the way to go for these currency translation differences. One thing I'd add is to be very careful about your exchange rate sources and document them thoroughly. I always use the Federal Reserve's daily exchange rates and create a detailed memo explaining the methodology - which rates were used for which items and why. This becomes crucial if you're ever questioned during an exam. Also, since you're dealing with multiple years of unfiled returns, consider whether you need to address any potential penalties under the reasonable cause provisions. The IRS tends to be more understanding when there's a legitimate business reason for the delay and you're making a good faith effort to comply correctly.

I see a lot of detailed responses here already but wanted to add that timing matters too. If you formally dissolved your sole proprietorship and formed the LLC as a completely separate entity with new EIN, business accounts, etc., you might have a stronger case for treating it as a new business eligible for startup costs rather than just organizational costs. Did you completely close out the sole prop and start fresh, or was it more of a conversion? That distinction can matter for how the IRS views it.

That's exactly the right approach, Khalil! Since you kept the same EIN and it's a single-member LLC taxed as a disregarded entity, the IRS will definitely view this as a continuation of your existing business rather than a startup. Your $6,700 in formation costs should be treated as organizational expenses under Section 248. You can deduct $5,000 immediately and amortize the remaining $1,700 over 15 years (about $113 annually). Make sure to keep detailed records separating the LLC formation costs (legal fees, state filing fees, operating agreement drafting) from any regular business expenses you might have incurred during the transition. One tip: if you had any costs related to transferring assets from the sole prop to the LLC (like updating contracts or transferring licenses), those might be treated differently than the pure organizational costs, so keep those receipts separate as well.

Last year I became so obsessed with transcript updates that my girlfriend threatened to hide my phone. 😂 I discovered that my account was on a Tuesday update cycle while my roommate's was on a Friday cycle. No rhyme or reason to it! When I called the IRS (after 2 hours on hold... fun times), they confirmed different accounts are assigned different cycle codes. Check the top of your transcript for a cycle code ending in 01, 02, etc. - that tells you which day of the week you're on. Mine was 20230905 which meant Tuesday updates. The whole system feels like it was designed by someone who really enjoys watching people suffer.

This is my first year really diving deep into understanding transcript cycles and wow, what a learning curve! I filed on February 15th and have been checking daily with no luck. After reading through all these comments, I'm realizing I might be on a Tuesday cycle instead of the Thursday/Friday one everyone talks about. @Miguel Hernández - thank you for the cycle code tip! I just checked and mine ends in 02, so I'm guessing that means Tuesday updates? Going to stop the daily morning ritual and just check on Tuesday nights from now on. It's crazy how the IRS doesn't explain any of this upfront - we're all just figuring it out through trial and error and community knowledge sharing!

Is anyone seeing different estimated refund amounts between Credit Karma and the IRS Where's My Refund page? CK showed I should get $2,457 but the WMR tool says I'm getting $2,403. Not a huge difference but still concerning. Return was accepted Feb 10th and still processing.

I'm in a very similar situation - filed through Credit Karma on February 2nd, accepted February 9th, and still getting the "still being processed" message. It's been over 3 weeks now and I'm getting pretty anxious too, especially since I also need the money for an unexpected expense. What's frustrating is that Credit Karma estimated my refund at $3,124 but when I finally got through to check with the IRS, they said it would be $3,089. Not a huge difference but still makes me wonder what else might be off. I've been checking the Where's My Refund tool obsessively (probably not helping my stress levels) but it's the same generic message every time. At this point I'm just hoping it shows up in the next week or two. The uncertainty is the worst part - I can handle waiting if I know there's a timeline, but this limbo is killing me. Thanks for posting this - at least I know I'm not the only Credit Karma filer dealing with these delays!