Thanks for this advice! I just pulled out my Form 4549 and compared it to the CP22. You're right that there are penalties listed on the CP22 that weren't on the examination report, but they only account for about $1,200 of the difference. There's still $1,550 unaccounted for, which seems to be an additional tax assessment that wasn't in our agreement.

That's concerning. When you and the auditor reached an agreement, you should have signed a form acknowledging the additional tax assessment. Check if you have a copy of this agreement - it's your strongest evidence. With that $1,550 unexplained difference, you should definitely contact the IRS promptly. When you call, ask specifically for the "examination department" and reference your audit case number. They should be able to pull the records and see what was actually agreed upon. Be prepared to fax or mail copies of your documentation showing the original agreed amount.

This is excellent advice. The IRS often combines multiple issues in a single notice, especially if they're doing a multi-year review. I've seen CP22s that reference adjustments from completely different issues all bundled together.

I never thought to check that! We do use Workday actually. Is this something in the benefits section or somewhere else? I'll have to poke around tomorrow. If I could set preferences that would be awesome.

Check under the Payroll section in Workday. Look for something called "Tax Withholding" or "W-4 Elections." Most versions have a withholding calculator where you can play with different scenarios. Some even have a slider where you can choose between maximizing paychecks (0 refund) or getting a specific refund amount. It's usually in the same place where you would update your W-4 information. The calculator is pretty helpful because it shows how each change affects both your paycheck and your expected refund. If you don't see it, your HR department can tell you if this feature is enabled for your company.

This is actually a myth that needs to die. For most normal people, the "interest" you'd earn on the extra $20-40 per paycheck is minimal compared to the psychological benefit of getting a larger refund. Most people don't invest that small difference anyway.

You're missing the bigger financial picture. Even small amounts add up significantly over time, especially with compound interest. An extra $40 per paycheck is $1,040 annually that could be in your investment accounts growing instead of sitting with the IRS. But more importantly, having access to your full earnings gives you financial flexibility throughout the year. That money could go toward paying down high-interest debt, building an emergency fund, or investing in retirement accounts with tax advantages. It's about having control of your own money rather than voluntarily restricting access to it. For people struggling with cash flow issues, every dollar in their regular paycheck matters.

But what if there is a huge difference? My assessment from January valued the land at 120k, but the July one (closer to when I started renting) suddenly jumped to 180k due to some county-wide reassessment. That's a big difference in depreciable basis!

In that case, where there's a substantial difference that materially affects your tax liability, you should definitely go with the most accurate assessment closest to your placed-in-service date. The July assessment would be appropriate since it reflects the most current valuation when you began renting. For significant changes like you described, it's also worth consulting with a tax professional who specializes in real estate to ensure you're taking the right approach. You might even want to get a private appraisal that specifically breaks out the land value as of your placed-in-service date to have solid documentation if the IRS ever questions your depreciation calculations.

This is good advice! My HUD-1 settlement statement had this breakdown too. Made it super easy come tax time. Always check your closing docs first before digging through property tax records.

Do you know what happens if you use offshore betting sites that don't issue W-2Gs? Asking for a friend...

The legal requirement to report gambling income applies regardless of whether you receive a W-2G or not, and regardless of where the gambling took place (including offshore sites). Your "friend" still has a legal obligation to report all gambling income. The IRS has been increasingly focusing on unreported gambling income, especially with the expansion of legal sports betting. While offshore sites might not issue tax forms, there's still a paper trail through bank/credit card transactions or cryptocurrency transfers that could be discovered in an audit.

Most of the major betting apps/sites have an option to download your annual betting history as a CSV or PDF. Usually under Account → History → Tax Documents or something similar. I download mine quarterly so it's easier to manage. Then I just use a spreadsheet to separate wins and losses.

That's super helpful, thanks! I didn't realize you could download everything like that. Definitely going to check that option on my apps.

I actually just checked my mail more carefully and found a letter from the IRS that I thought was junk! It's a CP12 like you mentioned. Looks like they disallowed part of my Schedule C deductions because they said I didn't provide enough documentation. Is there a way to appeal this or provide the documentation now?

Yes, you absolutely can appeal this decision! The CP12 notice should include instructions for how to respond if you disagree with their adjustments. Typically, you have 60 days from the date of the notice to submit your appeal. To appeal, you'll need to write a letter explaining why you disagree with their adjustment and include copies (never originals) of any supporting documentation for the deductions they disallowed. This might include receipts, invoices, bank statements, credit card statements, or other records that prove these were legitimate business expenses. Make sure to reference your tax ID number and the CP12 notice number in your response.

This happened to my sister too! They held her whole refund for like 2 months. The annoying part was they didn't clearly tell her it was for identity verification - she only found out when she finally got through to someone on the phone.