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Just to add another perspective - the 'c' markings sometimes appear on tax transcripts as well, not just on physical documents. They typically show up in the IRS internal systems as verification codes. If you order your tax transcript online through the IRS website, you might see these marks in the digital version too. If you're updating previous returns for 2025 filing season, make sure you're using Form 1040-X for amendments and reference your original tax year. Those 'c' marks won't affect your amendment process at all.
Do we need to request transcripts before filing amendments? I assumed I just need my original return copy. Also, how far back can you amend returns? I might have similar issues with my 2021 taxes.
You don't absolutely need transcripts before filing amendments, but they're extremely helpful to ensure you have the exact information the IRS has on file. Having your own copy of your return is good, but the transcript shows how the IRS actually processed it, which sometimes differs from what you submitted. For amended returns, you generally have 3 years from the original filing date or 2 years from when you paid the tax, whichever is later. So for 2021 taxes (typically filed in 2022), you should still be within the amendment window for the 2025 filing season. I'd recommend grabbing the transcript though - it makes the amendment process much smoother when you can see the IRS's internal codes and processing marks.
I just wanted to share that my tax preparer always marks items with 'c' when she's checked them during preparation - it's a common notation system among tax professionals too, not just the IRS. Might be why you're seeing those marks. Is it possible the document is from your preparer and not directly from the IRS?
That's a good point about tax preparers! My accountant uses checkmarks and little symbols all over my returns before submitting. I always thought it looked so messy but I guess that's their system.
Thanks for bringing this up! I double-checked, and you're right - the documents are actually from my tax preparer's office, not directly from the IRS. They sent me copies of what they submitted. That makes so much more sense why there are these little marks all over them. I feel kinda silly now for worrying, but at least I understand what I'm looking at. Guess my preparer was just marking things they verified before submitting. Learning something new about taxes every day!
I had this exact situation last year. Here's what happened: my 401k administrator returned excess contributions with code E, and then the IRS computer system automatically flagged it as taxable because many code E distributions ARE partially taxable (if there were earnings on the excess contributions). The key is, like others mentioned, that your Box 1 and Box 5 are identical, proving these were 100% after-tax contributions with no earnings. Don't just pay the extra tax - this is worth fighting!
Thanks for sharing your experience! Did you end up having to file an amended return, or were you able to get it resolved by just responding to the IRS notice?
I didn't need to file an amended return. I just responded to the IRS notice with a detailed explanation and a copy of my 1099-R. I highlighted Box 1 and Box 5 showing the identical amounts and explained these were after-tax contributions being returned. The IRS accepted my explanation and canceled the proposed adjustment about 6 weeks later. They sent a letter confirming no additional tax was due. Just make sure to respond within the deadline given on the notice, and keep copies of everything you send them.
Has anyone had success resolving this by calling the phone number on the IRS notice rather than writing? My dad has the same issue with his 401k distribution but he's not good with written explanations.
I called about a similar issue last year. If you can actually reach someone (big if), they can be helpful. I got through after 3 attempts and about 90 minutes on hold. The agent was able to see that my 1099-R boxes matched and noted my account that no additional tax was due. Still got a confirmation letter about a month later.
Don't forget about your state tax return too! You'll need to file a similar substitute form for your state taxes in most cases. Each state has their own version of the federal substitute W-2 form. Just google "[your state] substitute W-2" to find it.
Good point about state taxes! I live in a state with no income tax so I totally forgot about this aspect.
Make sure you also report this guy to your state's labor department! Even though the business is closed, he might still face penalties for wage theft and improper payroll practices. Those agencies can sometimes go after personal assets if the violations were bad enough. Might get some justice for all of you who worked there.
Have you checked your IRS transcript online? You can request it at irs.gov and it shows all activities on your account including stimulus payments, refunds issued, etc. Might give you some clues about what's happening with your account.
Thanks for the suggestion. I tried accessing my transcript online but because I've been overseas so long, the verification system won't work for me (it needs a US phone number I've had for more than 2 years, which I don't have since moving back). I requested a mailed transcript but haven't received it yet. Seems like everything with the IRS requires workarounds when you've been an expat.
That's a common issue for expats! For the phone verification problem, you might want to use a family member's phone number temporarily if possible. Another option is to request your transcript by filing Form 4506-T instead of using the online system. For recently returned expats, sometimes the local Taxpayer Advocate Service can help navigate these authentication issues. They're separate from the regular IRS customer service and can sometimes cut through red tape when standard procedures don't work for your situation.
Did you use direct deposit for your tax refund when you filed the streamlined returns? I had issues with my stimulus because I used paper check for my refund, but my friend who used direct deposit got her stimulus automatically despite living abroad.
This is accurate - the payment method makes a huge difference. I work at a tax prep office and we've seen that international filers who used direct deposit had about 80% success rate getting stimulus automatically, while paper check people had endless problems.
Jessica Suarez
Another thing to try - check if your W-2 is available on the IRS website. You can create an account at irs.gov and sometimes they have W-2 info reported by employers even if they didn't send it to you. I found mine there last year when my employer claimed they "mailed it" but it never showed up.
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Marcus Williams
ā¢Is this the "Get Transcript" feature? I looked at that but got confused about which option to select.
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Jessica Suarez
ā¢Yes, it's through the Get Transcript service. You'll need to select "Wage and Income Transcript" when prompted for the type of transcript. This will show information from forms submitted to the IRS including W-2s and 1099s. Creating an account can be a bit of a process since they've increased security measures. You'll need your ID, social security number, and some financial account numbers for verification. Once you're in, you can access transcripts for the current tax year and previous years.
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Lily Young
You should definitely report them to your state's labor department too! It's illegal for them to withhold your W-2. My cousin's employer did this and got fined pretty heavily when the state found out. They were doing shady stuff with the payroll taxes.
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Kennedy Morrison
ā¢This! Employers sometimes do this when they haven't been paying the proper employment taxes. Definitely report them to both the IRS and state labor board. Make them face consequences!
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