My brother-in-law went through an audit last year and it was like trying to fill a swimming pool with a teaspoon - endless requests for more documents. They questioned his rental property expenses and asked for everything from repair invoices to tenant communications. He thought he was prepared with a shoebox of receipts, but they wanted digital copies of bank statements showing the exact transactions. By the end, he spent more on the accountant helping him than the tax difference in question! The moral of the story: keep EVERYTHING, and organize it like your financial life depends on it.

This is such valuable insight for your research paper! I went through a correspondence audit in 2022 after claiming the Child Tax Credit. They specifically requested: - Birth certificates for both kids - School enrollment records - Medical records showing the kids lived with me (pediatrician visits, etc.) - Proof of address (utility bills, lease agreement) - My ex-wife had to sign a Form 8332 releasing her claim to the exemption What struck me most was how the IRS letter made it sound like I was being investigated for fraud, when really they just needed to verify my kids qualified. The whole process took about 5 months, but once I provided everything they asked for, they accepted my return as filed. One thing that might be interesting for your paper - the audit seemed triggered by the fact that my income increased significantly from the previous year (job promotion), but I was still claiming the same credits. The IRS computers probably flagged it as unusual. Makes you wonder how many legitimate taxpayers get audited just because their circumstances changed!

Wait I'm confused about something here. Doesn't the original mortgage create complications? If the bank released the frontage lot from the mortgage, wouldn't that be considered debt relief and potentially taxable? Or does the 1031 exchange override that somehow?

This is a really helpful discussion! I'm dealing with a somewhat similar situation where I subdivided investment property for a 1031 exchange, though mine was commercial land rather than residential. One thing I learned from my tax attorney is that you should also consider whether any of your closing costs from the original purchase can be added to your basis. Things like title insurance, legal fees, and survey costs from when you bought the 26-acre parcel can often be included in your adjusted basis calculation, which would reduce your taxable gain. Also, since you mentioned fighting a tax levy - if those legal fees were related to defending your title to the property or protecting your investment, they might also be added to basis rather than treated as a current deduction. The FMV allocation method you're using sounds correct, but definitely document everything thoroughly. The IRS tends to scrutinize subdivided land transactions more closely, especially when there are significant value differences between parcels like highway frontage vs. wetlands. Good luck with Form 8824 - it's definitely one of the more complex forms to navigate!

I can totally relate to that anxiety of waiting for mystery mail! I'm in a similar boat - filed on January 28th and got flagged for verification about 3 weeks ago. From everything I've read here and experienced myself, IRS letters almost never show up with images in Informed Delivery, so that's actually a good sign that it could be your verification letter! The waiting game is brutal, but it sounds like you're right on track timeline-wise. Most people seem to get their letters within 2-4 weeks of being told they need to verify. Once you do get it, make sure to verify as soon as possible - I've seen people here say they got their refunds much faster than the 9-week estimate once they completed verification. Fingers crossed that today's mystery mail is exactly what you're hoping for! The IRS really needs to work on their communication and transparency with this whole process.

I'm going through this exact same situation right now! Filed on February 20th and have been stuck in verification limbo for about 3 weeks now. The mystery mail in Informed Delivery is so nerve-wracking - I literally run to my mailbox every day hoping it's finally THE letter. From reading all the responses here, it's really reassuring to know that IRS letters typically don't show images in Informed Delivery. I had no idea that was normal! I've been getting my hopes up every time I see mail without a preview image, thinking "this has to be it." The waiting game is absolutely brutal, especially when you're counting on that refund. I've been checking Where's My Refund obsessively every morning, but it just keeps saying the same thing. At least now I know from everyone's experiences here that once you actually get the letter and verify, things seem to move much faster than the 9-week estimate they give you. Really hoping your mystery mail today is your verification letter! Please update us when you find out - I think there are a lot of us in the same boat right now just waiting and hoping. This whole process really makes you appreciate how much we rely on that refund money for bills and expenses.

One option nobody's mentioned yet - have you considered an Offer in Compromise? If your financial situation truly doesn't allow you to pay the full amount, even over time, you might qualify to settle the debt for less than you owe. The 433-F is actually part of that application process too.

I went through almost the exact same situation last year with an inherited 401k that created a huge tax bill. Here's what I learned from experience: The IRS will definitely scrutinize your Form 433-F carefully when the amount is over $50k, but they're not necessarily looking to reject your installment plan - they just want to make sure you're paying what you reasonably can afford each month. That said, if you have the ability to pay down to $50k first, I'd strongly recommend doing that. The streamlined installment agreement process for amounts under $50k is SO much simpler. You'll avoid the 433-F entirely, get faster approval (often automatic), and have fewer ongoing compliance requirements. One thing to consider: even if you pay down to $50k initially, you can always request to modify your payment plan later if your financial situation changes. The IRS is generally willing to work with taxpayers who are making good faith efforts to pay. Also make sure you're factoring in the setup fee for the installment agreement ($31-225 depending on how you apply and pay) and the ongoing interest/penalties. Sometimes it's worth exploring other financing options first if you have good credit.

Has anyone else noticed that the IRS sometimes flags returns with newly issued SSNs for review? This happened to my sister. It didn't mean anything was wrong, but her refund was delayed by like 8 weeks. Might want to file early if you can!

I had a very similar situation when I got my SSN in late 2023! Just wanted to confirm what others have said and add a few practical tips: You're absolutely eligible for both credits. The Child Tax Credit has no timing requirements for when YOU got your SSN - only that your daughter has a valid SSN (which she does). For EIC, as long as you have your SSN by the filing deadline, you're good. A few things that helped me: 1. Keep all documentation showing when you received your SSN - sometimes they ask for verification 2. If you're using tax software, it might flag your return as "unusual" but don't worry, that's normal for first-time filers 3. Consider filing a paper return if the software gives you trouble - I had issues with TurboTax not recognizing my situation properly Also, make sure you understand the income limits for both credits. EIC has pretty generous limits especially with a qualifying child, but CTC starts phasing out at higher incomes. Good luck with your filing!