My sister and I both got these notices. She used taxr.ai to figure out what was up and got her refund 2 weeks later. Something about her W2 triggering a review. Im gonna try it too tbh

Got mine about 10 days ago too! Super frustrating because I was counting on that refund for some bills. From what I've read online it's happening to a lot of people this year - seems like they're being extra cautious with reviews. Hang in there, hopefully it doesn't take the full 120 days 🤞

Has anyone considered the F reorganization approach? IRC Section 368(a)(1)(F) provides for a "mere change in identity, form, or place of organization of one corporation, however effected." You could potentially form a new S corporation and have it acquire the C corporation in an F reorganization. This would effectively convert the C corporation to an S corporation while potentially providing more flexibility than a direct conversion.

One strategy worth exploring is a gradual distribution approach over several years rather than trying to access all the accumulated earnings at once. Since you're the sole shareholder, you have complete control over the timing. You could take reasonable salary payments (which are deductible to the corporation), combined with modest dividend distributions spread over multiple tax years to manage your overall tax bracket. This won't eliminate the double taxation on accumulated E&P, but it can significantly reduce the overall tax burden by keeping you in lower marginal tax brackets. Another consideration is whether the corporation has any business expenses or investments that could be made before distributions - things like equipment purchases, facility improvements, or even funding a corporate retirement plan. These legitimate business expenses reduce the accumulated E&P and give you more tax-efficient ways to benefit from the corporate assets. The key is that there's no magic bullet to completely avoid tax on C corp accumulated earnings - the tax code specifically prevents this. But with proper planning, you can minimize the total tax impact through timing and strategic use of corporate funds.

Another thing to consider - make sure that promissory note is VERY detailed. My sister loaned me money for my house and we had a simple note, but our tax guy said it wasn't enough. He said we needed: 1) Fixed repayment schedule 2) Consequences for late/missed payments 3) Security/collateral details 4) Actual interest rate (even if small) Without these, he said the IRS might consider it a gift rather than a loan regardless of our intentions. We had to create a much more formal document later which was a huge hassle.

Just wanted to share my experience as someone who went through this exact situation last year. I loaned my son $180K for his house purchase with what I thought was a proper promissory note, but I made the mistake of not including any interest rate. Come tax time, I got hit with the imputed interest rules everyone's mentioning here. The IRS calculated that I should have charged about 4.2% interest (the AFR rate at the time), which meant I had to report roughly $7,500 in phantom income I never actually received. My son couldn't even claim the interest deduction because he never actually paid any interest. The lesson learned: always include at least the minimum AFR interest rate in your family loan, even if it's just 2-3%. It saves both parties from tax complications and makes the loan look legitimate to the IRS. I wish I had known about these rules beforehand - would have saved me a lot of headaches and unexpected tax liability.

This is really helpful information! I had no idea about this extension. I'm definitely going to go back and review my 2019 return - I remember being super stressed that year with a job change and probably rushed through it. Quick question though - when you file an amended return using Form 1040-X, do you need to include copies of all the supporting documents again, or just the new ones for the changes you're making? I don't want to mess this up and delay my refund even more. Also, does anyone know roughly how long amended returns are taking to process right now? I know regular returns were backed up for a while, wondering if amendments are facing similar delays.

This thread has been incredibly helpful! I'm in a similar situation where I think I rushed through my 2019 and 2020 returns during all the pandemic chaos. Reading through everyone's experiences, it sounds like this Notice 2023-21 extension is definitely worth taking advantage of. I'm particularly interested in the tools people have mentioned for reviewing old returns. Like @Carlos Mendoza, I'm pretty sure I missed some deductions in 2019 - I started working from home that year but didn't claim any home office expenses because I wasn't sure how it worked. One thing I'm curious about though - if I do find mistakes and file an amended return, will that trigger an audit or extra scrutiny from the IRS? I've always been paranoid about amending returns because I worry it flags you for review. Has anyone had issues with this, or is it pretty routine when you're claiming legitimate deductions you originally missed? Thanks to everyone who's shared their experiences here - this is exactly the kind of real-world advice that makes navigating tax stuff so much easier!

Trust assets only avoid the 9-month estate tax filing if they're in an irrevocable trust established well before death. If your dad had a revocable living trust (the most common kind), those assets are still considered part of his taxable estate. But with $850k total value, you're nowhere near the federal filing threshold anyway.

I'm sorry for your loss, Lucas. Dealing with estate matters during grief is incredibly challenging. Based on what you've shared, with an $850,000 estate value, you're well below the federal estate tax filing threshold of $13.61 million for 2025, so you likely won't need to file Form 706. However, don't overlook these important steps: 1) File your father's final income tax return (Form 1040) for 2025 by April 15, 2026, 2) If the estate generates any income after his death, you may need to file Form 1041, and 3) Even though you're in Texas (no state estate tax), you'll still need to handle property transfers through the county. Regarding the trust - if it's a revocable living trust (most common), the assets are still considered part of his estate for tax purposes, but the trust should help you avoid probate proceedings. Make sure all assets were properly titled to the trust before his passing, as any assets not in the trust may need to go through probate. Consider consulting with a probate attorney for at least one session to ensure you're handling everything correctly - it could save you significant headaches later.