Quick tip: If you're still worried, you can also check your payment status by requesting your tax account transcript on the IRS website. It's free and usually updates within a week after a payment is processed. Just go to IRS.gov, create an account if you don't have one, and request an "account transcript" for the current tax year. The transcript will show any payments received and when they were applied to your account. Much easier than calling in most cases!

Just a heads up for anyone using payusatax - they charge a processing fee that's higher than some other payment options. I think it was like 1.96% when I used it. If you're paying a large amount, it might be worth looking at other IRS-approved payment methods like DirectPay (free but sometimes glitchy) or EFTPS (free but requires registration ahead of time).

Has anyone actually had the IRS audit them for this? I have a trucking company and a property management LLC. Both 100% owned by me. I've been running separate retirement plans for years with no issues.

Your colleague is definitely wrong here. The controlled group rules under IRC Section 414(b) and (c) are crystal clear - if the same person owns 80% or more of multiple businesses, they form a controlled group for retirement plan purposes regardless of what industries they're in or where they're located. In your example with 100% ownership of both the dental practice and auto repair shop, these absolutely constitute a brother-sister controlled group. The owner cannot set up a retirement plan for just the auto shop without including eligible employees from the dental practice in the nondiscrimination testing. The IRS specifically designed these rules to prevent exactly what your colleague is suggesting - cherry-picking which employees to cover based on business profitability or convenience. The fact that the businesses are unrelated operationally is completely irrelevant to the controlled group determination. I'd recommend showing your colleague the actual code sections or getting a definitive ruling from a qualified ERISA attorney. This is one of those areas where being wrong can result in massive penalties and plan disqualification.

Has anyone successfully gotten this tax forgiven or reduced? I'm a single parent and was self-employed in 2020 during the pandemic just trying to keep my family afloat. Now they're hitting me with this huge bill for taxes I didn't even know were deferred.

I went through this exact same situation last year! As a self-employed person, you ARE responsible for paying this because when you're self-employed, you're considered both the employer and employee for tax purposes. The "employer's share" refers to the 6.2% Social Security tax that was deferred under the CARES Act. Here's what likely happened: When you (or your tax preparer) filed your 2020 taxes, the deferral was automatically applied to reduce what you owed at that time. This was actually beneficial then, but now that deferred amount is coming due. Don't panic about the 3-week deadline - you have options! You can set up a payment plan directly with the IRS online if you can't pay the full $3,800 at once. For amounts under $50,000, you can get up to 72 months to pay it off. The setup fee is only about $31 if you do it online with automatic payments. Check your 2020 tax return (specifically Schedule SE) to confirm the deferral was taken. And definitely don't ignore this - the sooner you address it, the better your options will be. Payment plans stop most penalties from accumulating, which saves you money in the long run.

One thing nobody's mentioned yet - there are different rules if your annual business income is over $27 million (average of last 3 years). If you're over that threshold, you're considered a "tax shelter" and subject to different bonus depreciation rules. Also, the bonus depreciation rules are different depending on when you placed the properties in service. The 2017 tax reform made big changes: - 100% for property placed in service after 9/27/2017 through 2022 - 80% for 2023 - 60% for 2024 - 40% for 2025 - 20% for 2026 - 0% after 2026 Make sure your CPA considers these phase-out periods!

Be careful with DIY cost segregation! I tried to do my own for my rental last year based on some percentages I found online, and ended up getting audited. The IRS wanted to see a formal engineering report to back up my allocations. If you're going to do this, either use one of the specialized services mentioned or get a real cost segregation study from a qualified firm. The few thousand you'll spend on proper documentation is worth it compared to dealing with an audit and potential penalties.

One thing nobody mentioned yet: Form 1139! Instead of filing an amended return (1120X), C corporations can file Form 1139 "Corporation Application for Tentative Refund" for capital loss carrybacks. The BIG advantage is that the IRS processes these much faster - you can get your refund in 90 days instead of waiting 6+ months for an amended return to process. BUT - and this is crucial - Form 1139 must be filed within 12 months of the end of the tax year in which the loss occurred. For a 2022 loss, if your tax year ended December 31, 2022, you would have had to file Form 1139 by December 31, 2023. If you missed that window, then you're back to the amended return route.

Just wanted to add a crucial timing consideration that could save you significant money: Since you're dealing with substantial penalties and interest that continue to accrue, I'd strongly recommend filing your Form 1120X as soon as possible - don't wait until closer to the October 2025 deadline. Even though you have until then to file the amended return, every month you delay means more penalties and interest accumulating on that $170,000 balance. Once you file the 1120X claiming the capital loss carryback, the IRS will stop the penalty clock on any tax liability that gets eliminated by the carryback. Also, make sure to include a detailed statement with your amended return explaining the capital loss carryback calculation and referencing the specific losses from your 2022 return. This helps the IRS processor understand exactly what you're doing and can prevent delays or requests for additional documentation. Given the complexity and dollar amounts involved, this definitely seems like a situation where professional help would be worthwhile to ensure everything is done correctly the first time.