Just be careful about health insurance! If you're covering her under your health insurance as a dependent, some plans require that you claim them on taxes too. My daughter's work offered her insurance even though she was part-time, and when I let her file independently (big mistake), it caused issues with my insurance company.

This is such a common situation for parents! Based on what you've described, you should definitely continue claiming your daughter as a dependent. She clearly meets all the qualifying child tests - she's under 19, she's your child, she lives with you for more than half the year, and most importantly, you're providing more than half of her total support. The fact that she earned $8,200 doesn't disqualify her from being your dependent at all. There's no income limit for qualifying children (that only applies to qualifying relatives). You'll likely save significantly more in taxes by claiming her than she would save by filing independently. Here's what should happen: You claim her as a dependent on your return, and she files her own return but checks the box indicating someone else can claim her as a dependent. This way she can get back any taxes that were withheld from her paychecks, but you still get the tax benefits of claiming her. I'd recommend running the numbers both ways to see the difference, but in almost every case like this, the family comes out ahead when the parent claims the working teenager. The child tax credit or other dependent-related benefits you'll receive will almost certainly outweigh any small tax benefit she might get from filing independently.

Check if you claimed any credits like EIC or CTC. Those always take longer to process cause the IRS has to verify everything.

This happened to me too! Filed in January and state refund came in 10 days but federal took 4 months. Turns out I had a code 570 hold on my account for additional review. The key is definitely checking your transcript like others mentioned - it'll show you exactly what's happening. Don't panic though, as long as there's no notice about errors in your return, it's probably just routine verification. The wait is brutal but you'll get it eventually!

One additional thing to check - look at the tax year carefully. Sometimes people think the Letter 12C is for their current return when it's actually for a previous year. I made that mistake and sent in 2022 documents when they were asking about 2020, which caused even more delays.

Great advice from everyone here! Just wanted to add that if you're dealing with unemployment income like you mentioned, make sure you have your 1099-G form ready. The IRS often requests this for Letter 12C situations because unemployment compensation affects your adjusted gross income and tax liability. Also, since you mentioned getting all three stimulus payments, double-check that the amounts you reported on your return match what the IRS has on file. Sometimes there are discrepancies in their records about Economic Impact Payments that can trigger these verification requests. One more tip - if you claimed the Recovery Rebate Credit for any missing stimulus money, they'll definitely want documentation of what payments you actually received versus what you claimed. Keep records of any IRS letters you received about stimulus payments, as these can serve as supporting documentation. The 8+ month delay is unfortunately pretty common for these verification cases, but once you get them everything they need, it usually processes within 4-6 weeks. Hang in there!

Thank you all for the amazing advice! I'm going to: 1) Ask about their corporate structure and how they're handling 280E 2) Look into having each family member invest separately rather than through me 3) Make sure our bank won't give us issues with deposits 4) Use that taxr.ai site to analyze the investment docs before committing Really appreciate all the responses - this has been incredibly helpful!

One more thing to consider - make sure you understand the liquidity timeline for this investment. Cannabis PE investments are typically very illiquid, and you might not be able to exit early even if you need the money. Also, since you mentioned this is your first PE investment, be aware that cannabis operations can be volatile due to changing regulations at both state and federal levels. What's legal and profitable today might face new restrictions tomorrow. The 8% dividend sounds attractive, but make sure you're comfortable with the risk profile and that you won't need access to this capital for several years. Consider diversifying rather than putting all your investment capital into a single cannabis operation, especially as a first-time PE investor.

Has anyone actually fought one of these CP162 notices and WON without paying anything? I'm in almost the exact same situation with my research partnership LLC. We formed it in 2020 for an NSF SBIR grant application, have had zero income, and just got hit with a $2,100 penalty. I'm wondering if I should just pay it to avoid further issues or if it's worth fighting.

I went through this exact situation last year with my research LLC! Got a CP162 for $1,470 even though we had zero income and I was certain we filed on time. Turns out there was a processing error on the IRS side - our return was received but not properly recorded. Here's what worked for me: I gathered all my documentation (proof of timely filing from our accountant, copies of certified mail receipts, etc.) and submitted a written reasonable cause request. I emphasized that the LLC was formed solely for grant applications, had no income or business activity, and that we genuinely believed we had fulfilled all filing requirements. The key is to be very specific about your circumstances. Mention that it's an NSF grant application vehicle, detail your minimal expenses, and stress that this is your first penalty issue. I also included a timeline showing when we filed versus the deadline to demonstrate our good faith effort to comply. It took about 6 weeks, but they completely abated the penalty. Don't just pay it - you have legitimate grounds for relief based on what you've described. The IRS is actually pretty reasonable about these situations when you can show it was a genuine misunderstanding rather than willful non-compliance.