One thing nobody's mentioned yet - since your mom had a stroke and likely qualifies as disabled, she might be eligible for an IRS provision called "Disability Discharge." This isn't widely known but can be huge. I discovered this after my husband became disabled. You'll need medical documentation showing permanent disability, but if approved, it can result in forgiveness of certain tax debts. It's not guaranteed and doesn't apply to all types of tax debt, but definitely worth investigating given her stroke and ongoing health issues. Also, make sure to check if your state has similar provisions for state tax debt - many states have parallel programs for disability-related tax relief.

I'm so sorry you're dealing with this overwhelming situation. As someone who works in tax resolution, I want to add a few critical points that could really help your mom's case. First, given that she was self-employed and dealing with mental health issues, there's a good chance the IRS may not have accurate records of her actual income during those years. Self-employed individuals often have the IRS estimate their income based on industry averages, which can be way higher than reality. Getting those returns filed with actual income figures could significantly reduce what she owes. Second, her stroke and ongoing health issues could qualify her for "reasonable cause" relief from penalties. This is separate from hardship status and can result in substantial penalty reductions. You'll need medical documentation, but given the severity of her condition, this could eliminate a huge portion of her debt. Also consider that if she had very low income in some of those years, she may not have owed much (or anything) for those periods. Self-employed people only owe self-employment tax if their net earnings exceed $400 annually. The most important step right now is getting those returns filed to establish the actual tax liability rather than letting the IRS continue to estimate. Everything else becomes much clearer once you know what she actually owes versus what penalties and interest have accumulated.

Has anyone here used TurboTax for this kind of situation? I'm having the same issue as OP but wondering if the tax software will figure it out automatically or if I need to do something special.

I'm a newer member here but wanted to share what I learned from a similar situation. Like others mentioned, Form 8919 isn't the right form since you're properly classified as an employee with a W-2. The key thing to check is whether your employer is correctly handling tip reporting and withholding. If you reported tips to your employer (which it sounds like you did), they should be withholding Social Security and Medicare taxes on both your hourly wage AND your reported tips. The fact that nothing was withheld suggests a payroll processing error. I'd recommend checking with your employer's payroll department first - they may need to issue a corrected W-2. If they're unresponsive or the issue isn't resolved, you might need to contact the IRS directly to report the employer's failure to withhold required taxes. This is different from Form 8919, which is specifically for worker misclassification disputes. Make sure to keep documentation of your tip reporting (Form 4070 or equivalent records) in case you need to prove you properly reported your tips to your employer.

Has anyone actually gone through an audit after claiming the commercial credit? I'm worried that if I buy a Tesla Model Y through my business (marketing consultant), the IRS might flag it since it's such a popular personal vehicle. Thoughts?

This is such a timely discussion! I've been going back and forth on this exact issue for my small accounting practice. What really caught my attention is how the commercial credit seems to bypass all those constantly changing eligibility requirements that have made the personal credit such a headache. One thing I'd add is that the depreciation strategy becomes even more important when you factor in state tax implications. Some states conform to federal tax treatment while others don't, so you might end up with different basis calculations for state vs federal purposes. This can get messy fast if you're not planning for it. Also, for anyone considering this route, remember that the "primarily business use" test isn't just about mileage percentage. The IRS also looks at factors like whether you have other vehicles available for personal use, if the vehicle is kept at your business location, and whether it's actually suitable for your business needs. A contractor claiming a Tesla Roadster might face more scrutiny than someone claiming a Model Y for client meetings. The key is making sure your business justification is rock solid from day one, not trying to retrofit it after the fact.

I've seen worse situations than yours that still resolved favorably. Someone in my tax group had their return flagged for potential identity theft (not just verification), got multiple freeze codes, and still received their refund after 6 weeks. Compared to that, your situation seems to be following the normal post-verification pattern. The 151 code is concerning on its own, but in the context of a recent identity verification, it's often just part of the process. Just don't call the general IRS line - complete waste of time compared to the specialized departments.

I went through this exact scenario in 2023. The Tax Topic 151 with reference code 1242 after ID verification is actually more common than you'd think. What's happening is that your return is in a "limbo" state while their systems synchronize after removing the identity verification hold. The fact that your transcripts are showing all your credits is a really good sign - it means they've accepted your return details and just need to finish processing the verification removal. In my case, the 811 reversal code appeared exactly 10 days after I got the TT151 message, and my refund was direct deposited 3 days after that. The appeal rights language sounds scary, but it's just their generic message for any review situation. Keep checking your transcripts daily - that's where you'll see the real progress before WMR updates.

Don't forget to consider state taxes too! Federal estate taxes might not apply if the estate is under the exemption amount (currently over $12 million), but some states have much lower thresholds. I learned this the hard way with my mother's estate in Oregon, which has a $1 million exemption. We focused so much on the federal aspects that we missed significant state tax implications. Might be worth checking your state's rules.

Connor, I'm sorry for your loss. You're absolutely right to be concerned about the estate income tax implications - this is a common trap that catches many people off guard. The key insight you've discovered is correct: distributing the IRA and brokerage assets to the heirs within 2024 can indeed help you avoid the compressed estate income tax brackets (which top out at 37% on income over $15,200 for 2024). When you distribute these assets, the income gets "passed through" to the beneficiaries and is taxed at their individual rates instead. A few critical points to consider: 1. **Timing is everything** - The distributions need to actually happen in 2024, not just be authorized. This means completing all the paperwork and transfers before December 31st. 2. **Documentation matters** - Make sure you're properly tracking the "income in respect of a decedent" (IRD) amounts. The beneficiaries will need this information for their personal tax returns. 3. **Consider a partial strategy** - You don't have to distribute everything at once. You could do a partial distribution this year to reduce the estate's income, then continue distributions in 2025 based on what works best for each heir's tax situation. I'd strongly recommend getting both an estate attorney and a tax professional involved before making these distributions. The potential savings are significant, but you want to make sure you're executing this properly to avoid any complications down the road.