Is that really true about the training? I always assumed those places had actual accountants or something. How do they get away with charging so much if the people aren't even experts?

Yep, 100% true. The training at the place I worked was just a few weeks long. Some locations might have a manager with accounting experience, but many of the seasonal preparers are just people who completed the company's basic training program. They're trained to use the company's software, which asks the same questions online software asks you. They charge so much because of overhead (physical locations, staff, etc.) and because many people don't realize they're mostly paying for data entry rather than specialized expertise. The companies market themselves as "tax experts" which gives a false impression. For complex returns, you're better off with an actual CPA - and for simple returns, online filing is usually just as accurate but much cheaper.

Yes! I used Free File last year through TaxSlayer since my AGI was under the limit (around $73k). The interface was exactly the same as their paid version, just free. It handles W-2s, simple self-employment, and basic deductions fine. The only annoyance was having to go through the IRS website first to access it - you can't just go directly to the company site or they'll try to upsell you.

Wait, so if my tax liability is already low because of other deductions and credits, I might not get the full benefit from this energy credit? Is there any way to carry over unused portions to next year?

That's exactly right - if your tax liability is already reduced by other credits and deductions, you might not be able to use the full energy credit. Your tax liability can only go down to zero, not negative. For the Energy Efficient Home Improvement Credit (25C), there is currently no carryover provision, so any unused portion is unfortunately lost. This is different from the Residential Clean Energy Credit (25D) for solar panels and similar installations, which does allow you to carry forward unused credits to future tax years.

Good news! The Energy Efficient Home Improvement Credit (25C) doesn't have an income phaseout or limit. Unlike some other tax credits that start to phase out at certain income levels, this one is available regardless of your income. So your one-time bonus won't affect your eligibility at all. Just make sure your improvements meet the efficiency requirements and you have the proper documentation from your installer or manufacturer.

But could not signing create problems if you ever need them to answer questions about your old returns? Seems like burning bridges might backfire later...

Thanks for sharing your experience. Do you remember roughly how much the interest rate was? And did you end up just paying what they asked for in the letter or did you have to file an amended return anyway?

The interest was running around 5-6% annually, but it was the failure-to-pay penalty that really added up - that's 0.5% per month up to 25% of the unpaid tax. The notice gave me the option to just pay what they calculated or file an amendment if I disagreed. I just paid their amount since it was accurate. The CP2000 notice actually makes it pretty simple - they show what they found, calculate the difference, and give you payment options. You only need to file an amendment if you disagree with their calculations or if the missing income affects other parts of your return like credits or deductions.

Yes! This is what I did when I was missing a W-2. Just go to the IRS website and request a "Wage and Income Transcript" for the tax year you're concerned about. It shows everything reported to the IRS under your SSN including all W-2s, 1099s, etc. Super helpful for catching these issues before they become problems.

Did you mail actual physical copies of your documents or did you try to do it electronically? I'm wondering what's faster/better.

I mailed physical copies via certified mail with return receipt requested. The IRS isn't great with electronic submissions for these verification letters in my experience. Always keep copies of everything you send them - never send your only copies of important documents. The certified mail gives you proof they received it, which is important for meeting their response deadline. In terms of timing, they processed my physical mail response in about 4 weeks, which seemed reasonable.

Good point about verifying! This is definitely a real IRS letter. It has the official letterhead, my tax ID number, and references my specific tax return. It's asking me to mail documentation to their verification department, not asking for any payments. Thanks for looking out though - those scams are everywhere!