I'm right there with you on this CP05 journey! Got my notice on March 11th, so I'm at about 4 weeks now. Filed on February 9th and was really counting on that refund to help with some unexpected car repairs that popped up last month. The "income verification review" language absolutely terrified me at first too - I thought I was getting audited! My return was super straightforward (single W-2, standard deduction, small charitable donation), so I couldn't figure out what needed "verifying." This thread has been such a relief for understanding this is just routine now, not something we did wrong. I set up transcript access after reading everyone's advice here (seriously, you all are lifesavers!) and I'm doing weekly checks on Friday mornings instead of the daily obsessing I started with. That 570 hold code just sits there mocking me each week, but seeing all your success stories keeps me hopeful. What really gets me is how they can hold our money for months with zero updates while expecting us to file perfectly on time every year. The complete radio silence during this process is honestly worse than the waiting itself! But knowing most people here get their full refund in that 45-65 day window gives me hope we'll all see those magical 571 codes soon. Thanks for keeping each other sane during this awful waiting game! 🤞

I'm about 2.5 weeks into my CP05 experience and this thread has been absolutely essential for my peace of mind! Got my notice on March 24th after filing on February 18th. Like so many of you, I was initially terrified by that "income verification review" language - spent hours re-checking my simple W-2 return wondering what I could have possibly done wrong. What's been most helpful is setting up transcript access (thank you all for that tip!) and seeing that 570 hold code that everyone mentions. I'm checking every Sunday morning instead of the daily obsessing I was doing at first, which has definitely helped my stress levels. I was counting on my refund to help with some overdue medical bills, so the financial stress is real. But reading everyone's timelines and seeing that most people eventually get their full refund in that 45-65 day window gives me hope. It's frustrating how the IRS can hold our money for months with zero communication, but at least this community provides the real information their website doesn't! Thanks to everyone sharing their experiences - it's amazing how much more helpful this is than any official IRS resource. Here's hoping we all see those 571 codes soon! 🤞

One thing to keep in mind - if you also contribute to your HSA outside of payroll (like direct deposits from your bank account), those are handled differently. Those would be reported as employee contributions, and you'd need to deduct them on Form 8889. I made this mistake last year where I had both payroll deductions (code W) and separate contributions I made directly. I didn't realize I needed to handle them differently on my tax return.

Another thing to check is whether your employer made any actual employer contributions (like an HSA match) in addition to your payroll deductions. Both would show up with code W, but you'd want to make sure the total amount looks right. For example, my company contributes $500 annually to my HSA plus my own payroll deductions. So my W-2 shows the combined total with code W.

I've been a tax preparer for years and see this situation all the time. Just remember that the earnings portion ($900.06) is taxable in the year you take the distribution (2024), NOT the year you made the contribution. That trips up a lot of people. If you're under 59½, you'll also owe the 10% early distribution penalty on just the earnings portion. The original $6500 contribution comes back to you tax and penalty free.

This is a really helpful thread! I'm dealing with a similar situation but with a twist - I made the excess Roth IRA contribution in late 2023, but didn't realize my income was over the limit until I was preparing my 2024 taxes this year. By then it was past the 2023 filing deadline. I ended up removing the excess contribution plus earnings in early 2024 and got a 1099-R with code JP. Based on what everyone's saying here, I think I'll owe both the 10% penalty on the earnings AND the 6% excess contribution penalty for 2023 since I didn't remove it before the filing deadline. Does that sound right? And if so, do I need to amend my 2023 return to report the 6% penalty, or does everything just go on my 2024 return?

Just a quick tip - make sure you keep EVERY document related to this transaction. The county's initial offer letter, any negotiation correspondence, closing documents, receipts for any expenses related to the transaction, and especially documentation showing the original purchase price of your property. I went through this last year and created a complete file with all these documents which saved me when the IRS questioned my capital gains calculation. Also take photos documenting exactly what portion of your property is being taken before any work begins!

As someone who recently went through a partial property taking for a utility easement, I want to emphasize the importance of understanding the timing rules for capital gains. Since this is an involuntary conversion due to eminent domain, you actually have some special options that might help reduce your tax burden. Under IRC Section 1033, you may be able to defer the capital gains by reinvesting the proceeds into "like-kind" property within a specific timeframe (usually 2-3 years from the end of the tax year you received the compensation). This could be particularly beneficial given that your gain ($66,300 as calculated above) would likely exceed the prorated Section 121 exclusion. Also, don't forget that you can add any legal fees, appraisal costs, and other expenses related to fighting or negotiating the taking to your cost basis, which would reduce your taxable gain. I ended up saving about $3,000 in taxes by properly documenting these additional costs. Given the complexity and the significant dollar amount involved, I'd strongly recommend consulting with a tax professional who has experience with eminent domain cases before filing. The potential tax savings from getting this right could easily justify the consultation fee.

Has anyone tried handling this by separating the transactions? Like paying for business travel with cash, then reimbursing yourself personally with miles for other trips? Seems like that might solve the problem.

I dealt with this exact situation when I started my consulting business! The key thing to understand is that the IRS looks at actual cash outflow, not the "value" of rewards used. Here's what I learned from my tax attorney: When you use personal miles/points for business travel, you can't deduct anything because there's no actual business expense - you're essentially using a personal asset (the miles) that you already "paid for" through past personal spending. However, don't forget about the ancillary costs! If your husband paid any booking fees, taxes, or upgrade costs when redeeming those miles, those actual cash payments can be deducted as legitimate business expenses. For future planning, consider doing what Mateo suggested - pay cash for business travel (fully deductible) and save your personal miles for vacations. This maximizes your tax benefits while keeping everything clean and audit-proof. Also keep detailed records showing the business purpose of any travel, regardless of how you paid for it. The IRS will want to see that it was genuinely business-related.