One thing nobody has mentioned yet is that Section 117(d)(5) has been on shaky ground in recent years. During the 2017 tax reform discussions, there was talk of eliminating this exclusion entirely, which would have made all graduate tuition waivers taxable income. While it survived that round, it's always possible future tax legislation could modify or remove this benefit. Make sure whatever documentation you rely on is current. The IRS Publication 970 (Tax Benefits for Education) gets updated annually and contains official guidance on these educational tax benefits. Always worth checking the most recent version!

Just to add another perspective - I work in university payroll and see these situations frequently. The distinction everyone's discussing between 117(d)(5) and Section 127 benefits is crucial, but there's one more wrinkle to consider. If you're classified as more than a half-time employee (typically 20+ hours per week), some universities will automatically categorize ALL your tuition benefits under Section 127 rather than 117(d)(5), even if you're also teaching. This is because they view your primary relationship with the university as "employee" rather than "student." I'd strongly recommend getting written clarification from both your graduate school AND your HR department about how they're classifying your benefits. Don't assume that teaching one class automatically qualifies you for 117(d)(5) treatment if you're primarily employed in administration. The IRS looks at the substance of the relationship, not just the presence of teaching duties. Also, if your university is treating this inconsistently or you're getting conflicting information, document everything. You may need to make your own determination based on the facts and circumstances of your situation.

I opened my Tax Court packet after missing the deadline and it was a "Notice of No Jurisdiction" basically saying they couldn't hear my case. So i ended up calling a tax advocate who told me to just pay what i owed then file an amended return asking for a refund. Took like 9 months but i got about half back cuz they agreed with some of my deductions. Persistence pays off!

I'm really sorry to hear about your situation - missing that Tax Court deadline is incredibly stressful, but you're not completely out of options. First, definitely open that packet from the Tax Court. It's likely a "Notice of No Jurisdiction" as others mentioned, but you need to know for sure what it says. Since you mentioned this involved unreported Robinhood transactions, there's a good chance the IRS made some calculation errors or didn't properly account for your cost basis. Investment income reporting can be really complex, especially with apps like Robinhood where the 1099s don't always tell the full story. Here's what I'd recommend: 1) If you can afford it, pay the assessment and then file for a refund with Form 1040X - this gives you a fresh shot at contesting it, 2) Look into requesting an audit reconsideration if you have documentation the IRS didn't previously consider, 3) Consider the Collection Due Process hearing option which can provide another avenue to dispute the assessment. Also, make sure you have all your Robinhood statements and any documentation showing your actual cost basis for those transactions. The IRS often assumes zero cost basis when they don't have complete information, which can significantly inflate what you actually owe.

where did u find the cycle code? I cant find mine anywere on the transcript

Filed 1/19 and accepted same day with cycle code 20250405 too! Still waiting on mine as well. From what I've researched, the "05" means we're on the weekly Friday processing cycle, so our refunds should be released this Friday 2/7. Then it depends on your bank how fast they process it. Keep checking WMR (Where's My Refund) tool on IRS.gov for the most accurate updates!

You might want to file Form 843 (Claim for Refund and Request for Abatement) specifically requesting a refund of the abated amount. Include copies of the abatement approval letter and the 1099-INT. Check box 5a for interest abatement. I had a similar situation where I received the 1099-INT but no refund. The IRS had applied the credit to another tax year where I didn't actually owe anything, so it just sat in limbo. The Form 843 forced them to properly process the refund.

Don't forget you need to keep track of the interest you're paying tax on! If you never receive the money, you can file a claim for credit or refund using Form 1040-X for the year you reported the phantom interest income. But you only have 3 years from the date you filed the original return to file for a refund.

Has anyone here dealt with this situation where one of the partners is an S-Corp specifically? I'm concerned about the timing since S-Corps have different filing deadlines than partnerships.

One thing I'd add that hasn't been fully addressed - make sure you understand the potential for imputed underpayment assessments under BBA rules. Even though partnerships are pass-through entities, the IRS can assess and collect penalties at the partnership level for certain adjustments. When you file the 1065-X as your AAR, the IRS will review it and may propose an imputed underpayment based on the highest individual tax rate plus Net Investment Income Tax. The partnership can then make a "push out" election to have the adjustment flow through to the partners instead of being assessed at the partnership level. Given that you're dealing with an S-Corp partner, this could be particularly relevant since the ultimate shareholders might be in lower tax brackets than what the IRS would use for the imputed underpayment calculation. You'll want to consider whether to make the push-out election when filing the AAR or wait to see if the IRS proposes an assessment. Also, since you mentioned both partners agree on the correction, document that agreement well. It'll be helpful if the IRS has any questions about the adjustment during their review process.