That's fascinating! I had no idea the prohibition had such a political origin. Has there ever been any serious attempt to repeal the Johnson Amendment? I've heard some politicians talk about it, but nothing seems to happen.

There have been several attempts to repeal or modify the Johnson Amendment, most notably during the Trump administration. In 2017, President Trump signed an executive order that he claimed would reduce enforcement of the Johnson Amendment against religious organizations, but legal experts generally agreed it didn't actually change anything substantive in how the law is applied. There were also provisions in early drafts of the 2017 tax bill that would have repealed the Johnson Amendment for churches, but these were ultimately removed from the final version of the Tax Cuts and Jobs Act due to procedural rules in the Senate. The debate continues, with strong advocates on both sides - those who see it as a free speech issue and those who believe tax-exempt status shouldn't subsidize political speech.

Not all churches are mega-churches with huge incomes. Most religious organizations are small community churches, synagogues, mosques and temples that barely keep the lights on. Taxing them would literally shut many of them down and harm the community services they provide like food banks, homeless shelters, and counseling services.

This! My spouse and I actually calculated both ways - the tax savings from filing jointly versus the student loan payment increase from combining our incomes. We saved about $1,400 in taxes by filing jointly, but her income-based repayment would have gone up by $230/month, so filing separately made more sense for us.

I hadn't even thought about student loans! My husband is on an income-based repayment plan for his federal loans. I'll definitely need to calculate if the tax benefits of filing jointly would be offset by higher student loan payments. Thank you for bringing this up!

How do I request the First Time Abatement? Do I need to file a specific form with my amended return or call them directly?

You can request First Time Abatement in your letter that accompanies your amended return. Specifically state that you're requesting "penalty abatement under the First Time Abatement policy" and mention that you have a history of filing and paying on time before this incident. If you've already filed your amendment without requesting it, you can also call the IRS directly or submit Form 843 (Claim for Refund and Request for Abatement). The most important thing is to use those specific words - "First Time Abatement" - as it's a formal program the IRS offers but doesn't heavily advertise.

This! My wife and I had a baby in 2020 too and used our HSA. Make sure you have all the EOBs (explanations of benefits) from your insurance company and any receipts. The IRS is pretty strict about HSA documentation.

Thank you so much for the straight answer! Just to make sure I understand completely - if I file without the 1099 and I'm off by like $100 on my calculated gains, will I definitely get flagged for an audit? Or is there some margin of error the IRS is ok with?

The IRS doesn't have a specific "margin of error" they officially accept. Any discrepancy between what's reported on the 1099 forms and what you report on your return could potentially trigger an automated notice. It doesn't necessarily mean a full audit, but you would receive a letter asking for clarification or additional tax payment. Even small differences can cause issues because the IRS's automated matching system flags returns where the numbers don't match the forms they've received from financial institutions. This is especially true with crypto transactions where the IRS has been increasing scrutiny in recent years.

Yep, happened to me too. They claimed "mid-February" but it was February 27th when I finally got mine. I ended up filing in early March and still got my refund in reasonable time. Better to file correctly than deal with amendments.

Thanks for confirming I wasn't the only one! That makes me feel better about potentially waiting. Did your 1099 end up having any surprises compared to what you were expecting based on your own records?

This is really good advice, thanks! The letter does mention a 90-day period to respond. Do you know if we need to use any specific forms when sending the documentation? Or just include a letter explaining everything with copies of the supporting documents?

For a notice of deficiency, he should definitely include a written letter that references the notice number (should be in the top right corner of what they sent). No specific form is needed, but make sure he includes his social, the tax year in question, and contact info. I'd organize everything super clearly - like "Regarding item 1 on the notice, here are documents A, B, C that prove..." Makes it easier for whoever reviews it. And yeah, certified mail with return receipt is absolutely essential. My cousin learned that lesson the hard way.

They actually do have increased enforcement funding from the Inflation Reduction Act, so they've been ramping up enforcement activities. They're supposed to be targeting high-income taxpayers, but seems like everyone's getting caught in the net.