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.

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.

I went through this exact situation with my amended return last year! The key thing to understand is that there's no separate "amended return transcript" - everything shows up on your regular Account Transcript on the IRS website. You'll want to log into irs.gov, go to "Get Transcript Online" and pull your Account Transcript for the tax year you amended (so if you amended your 2022 return, look at the 2022 Account Transcript). Look for transaction code TC 971 which means they received your amended return, and TC 977 which means it's been processed. The "Where's My Amended Return" tool is honestly pretty useless - it rarely updates and gives minimal info. Unfortunately, the processing times right now are brutal - despite the official 16-week timeline, most people are waiting 6-8 months or even longer. I know it's incredibly frustrating, especially when you're anxious about the status, but at least checking the Account Transcript will give you a clearer picture of where things actually stand in the process.

I'm dealing with a very similar situation right now! Filed my amended return through TurboTax in April and have been going crazy trying to track the status. After reading through all these responses, I finally understand that I need to check my Account Transcript on the IRS website instead of relying on that useless "Where's My Amended Return" tool. Just logged in and found the TC 971 code showing they received it, but no TC 977 yet which means it's still processing. The 6-8 month timeline everyone is mentioning is absolutely insane - I had no idea it would take this long when I filed! TurboTax definitely doesn't prepare you for the reality of amended return processing times. Thanks to everyone who explained the transaction codes - this has been way more helpful than anything I could find on the official IRS site. Guess I'll just have to be patient and keep checking that Account Transcript every few weeks. Never using TurboTax for amendments again though!

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.