One more thing - when you respond to the CP2000, don't just send a stack of documents without explanation. Create a simple cover letter that clearly states: 1) You agree/disagree with the notice 2) The exact reason (Robinhood reported proceeds without cost basis) 3) A simple calculation showing your actual gain/loss I made the mistake of just sending in statements without a clear explanation and ended up getting another notice because they couldn't figure out what I was trying to show them.

As someone who just went through this exact same nightmare with Robinhood, I wanted to share what worked for me. I got a CP2000 for $23K that I definitely didn't owe. The key thing that saved me time was organizing everything before I responded. I created a spreadsheet with three columns: what the IRS thought I made, what I actually made, and the difference. Then I attached the supporting Robinhood documents for each transaction. What really helped was calling the number on the CP2000 notice (yes, you'll be on hold forever, but it's worth it). The agent told me that as long as I could prove my cost basis with official brokerage statements, they would accept my response. She also mentioned that these Robinhood cases are super common right now - apparently their reporting system changed and it's causing tons of these notices. My advice: Don't panic, gather ALL your Robinhood tax documents (the complete package, not just the summary), and respond with a clear explanation. It took about 8 weeks, but I got a revised notice showing I owed $0. You've got this!

11 Has anyone used a CPA or tax attorney to deal with this kind of situation? Wondering if it's worth the cost or if I'm better off handling it myself.

I went through a similar situation a few years back - owed about $52k and was terrified of losing my retirement savings. Here's what I learned: You can't really "volunteer" for a levy, but you can definitely be proactive. The IRS would much rather work with you than seize assets. When they do levy retirement accounts, you avoid the 10% penalty but still owe income tax on the distribution. My advice: Call the IRS immediately (or use one of those callback services mentioned here - they actually work). Be honest about your situation and request a reinstatement of your installment agreement. They often approve modified terms, especially if you can make a good faith payment upfront. I ended up making a partial withdrawal from my 401k (took the penalty hit) to show good faith, then negotiated a manageable monthly payment for the rest. Yes, it hurt short-term, but it kept me in control of the situation rather than having them dictate terms. Don't wait for the levy - once collection enforcement starts, you have way fewer options and much less negotiating power.

Has anyone successfully done the "file 1120 now, then amend later when approved" approach? I'm in the same boat but worried about the complexity of amending a C corp return to zero and filing a new S corp return later. Feels like it could create more problems.

I've been through this exact situation multiple times, and here's my recommended approach based on experience: **First, file Form 7004 immediately** to get a 6-month extension for both the 1120 and 1120S returns. This is crucial - you're at the deadline now and need to protect against penalties. **Second, document everything about your Form 2553 submission.** Keep copies of certified mail receipts, fax confirmations, or any proof of timely filing. The IRS is still experiencing major processing delays, so 2 months without response is unfortunately normal. **Third, avoid the "file 1120 then amend" strategy.** I've seen this create unnecessary complexity and potential state tax issues. It's much cleaner to wait for the S election approval and file correctly the first time. While waiting, you might want to prepare both returns so you're ready either way. If the S election is approved, file the 1120S. If denied (rare but possible), you'll have the 1120 ready to go within your extension period. The key is that Form 7004 buying you time - use it. Most S elections that are properly completed do get approved, it just takes time with current IRS processing delays.

Based on the current processing timeline, I'd recommend your friend submit the requested documents by April 30th at the latest. If they do that, they could potentially see a new DDD by June 15th. Another option is to check if they can upload the documents through the IRS online account portal rather than mailing them - as of March 1st, 2024, the IRS expanded their digital document submission options for certain verification requests.

As someone who's dealt with IRS verification requests before, I'd strongly suggest your friend respond ASAP with the requested documents. The key thing is that once the IRS flags a return for additional verification, any existing DDD gets canceled until they complete their review. For international students specifically, make sure to include a copy of your I-20 or DS-2019 along with the W2-G and 1099 forms - the IRS sometimes needs to verify your tax status. Also, send everything via certified mail so you have proof of delivery. The waiting is brutal, but being proactive with the documentation really helps speed things up!

I just went through this process for my 2023 taxes with our November baby, and it was much simpler than our rental property deductions! You'll need to get a Social Security Number for your baby though - the hospital will give you the paperwork, but it takes a few weeks to process. The IRS won't accept your return claiming the credit without a valid SSN for the child.

Congratulations on your upcoming bundle of joy! 🎉 As a parent who just went through this process, I can confirm that the $2,000 Child Tax Credit for 2024 is exactly right. What's great is that even though your baby arrives in June, you'll qualify for the full credit when you file your 2024 taxes next year - no proration needed! With your combined income of $185k, you're well within the safe zone. The phase-out doesn't start until $400k for married filing jointly, so you have plenty of breathing room there. One tip from my experience: start the Social Security number application process at the hospital right after birth. It typically takes 4-6 weeks to receive the card, and you'll need that SSN to claim the credit on your 2024 return. If for some reason it doesn't arrive by April 15, 2025, you can always file an extension to give yourself more time. Also, don't forget that up to $1,600 of that $2,000 credit is refundable, meaning you could get money back even if you don't owe taxes. The remaining $400 can offset any tax liability you have. It's honestly one of the more straightforward tax benefits to claim!