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Don't forget about depreciation too! If you're using actual expenses, you can depreciate the business portion of your vehicles. I track all my expenses in a spreadsheet including maintenance, gas, insurance, registration fees, etc. Then I apply my business use percentage (based on mileage log) to get my deduction amount. One important note: if your vehicles are used 100% for business and never for personal use, you can deduct 100% of the expenses. But the IRS tends to be suspicious of 100% business use for vehicles, so make sure you have solid documentation.
What kind of documentation would be considered solid proof for 100% business use? I have a personal vehicle too, so these test cars really are just for product development and demos.
For 100% business use, you'll want a detailed mileage log showing every trip was business-related. This should include dates, starting/ending locations, purpose of trips, and odometer readings. Having a separate personal vehicle helps your case significantly. Keep all maintenance receipts with notes about how they relate to business use. Take photos of the vehicles showing any business branding or modifications specific to your product testing. Also maintain a written business policy stating these vehicles are designated solely for product testing and not authorized for personal use.
Quick question - how old are these vehicles? If they're fully depreciated already, does that affect how the maintenance expenses are handled on taxes?
Even if the vehicles are fully depreciated, you can still deduct maintenance expenses based on business use percentage. Depreciation is separate from ongoing operating expenses. I have a 12-year-old truck that's fully depreciated but still deduct all the maintenance costs for the business portion of its use.
One thing nobody mentioned yet - you need to make sure you actually pay the amount you agreed to on the CP2000. Even if you responded agreeing to the assessment, if you didn't send the payment, they'll continue with collections. The CP3219A is basically saying "last chance before we really escalate this." Call the IRS (use one of the methods suggested above since getting through is a nightmare) and make sure: 1) your response was received, and 2) verify if your payment was received. If not, pay it ASAP. For future reference - stock sales are one of the biggest triggers for CP2000 notices because the basis reporting is so complicated. Always double check your 1099-B against the actual transactions.
Thanks for bringing this up - it's possible I didn't actually pay after responding. I sent back the response form agreeing to the amount, but now that I think about it, I don't remember if I included a check or if I was supposed to wait for a payment instruction. That could definitely be the issue. Has anyone here paid after responding to a CP2000? Did you include payment with your response or wait for them to send payment instructions?
You generally have two options: you can include payment with your CP2000 response, or you can wait for the IRS to send you a bill after processing your response. If you chose the second option and they haven't processed your response yet, that's likely why you received the CP3219A. I'd recommend calling the IRS (using one of the methods others suggested to get through) and ask about the status of your case. Tell them you agreed to the CP2000 and want to pay the amount due immediately. They should be able to take your payment over the phone or give you instructions for paying online. Make sure to get a confirmation number for any payment you make.
Make sure you're calculating the correct cost basis for your stock sales. This is the #1 reason people get these notices for stock transactions. The IRS gets the sale price reported from brokerages but often doesn't get the correct purchase price, especially for employee stock options or RSUs. For the future, keep detailed records of all stock purchases, grants, and vesting schedules. The default basis reporting is frequently wrong for company stock plans and can trigger these kinds of notices.
This happened to me too. My company's stock admin platform reported the sales to my brokerage but the cost basis information didn't transfer correctly. The IRS only saw the proceeds and thought I made way more profit than I actually did. What a mess.
Another tip - make sure all your children's Social Security Numbers are correct on your return. One year I transposed two digits on my daughter's SSN and it delayed my refund by almost 2 months because they had to verify everything manually. Double-check all those numbers before submitting!
Does the IRS send any notification if there's an SSN mismatch or do they just silently delay your refund? I'm paranoid I made a typo now.
They typically don't notify you immediately about the SSN mismatch. What usually happens is your return gets flagged for manual review, and your refund gets put on hold without any specific explanation. Sometimes you'll eventually get a letter in the mail explaining the issue, but that might come weeks after you file. The Where's My Refund tool will just show "still processing" with no details about why. That's why it's so important to triple-check those numbers before filing.
Has anyone tried filing early but claiming the child tax credit in an amendment later? Wondering if I could get the base refund faster and then deal with the credit later.
That's actually not a good strategy. Amended returns take MUCH longer to process - we're talking 16-20 weeks minimum instead of the 3-4 weeks for a delayed CTC refund. Plus, you'd have to pay to file twice. Just wait the extra couple weeks.
11 One thing to consider - check if you owed any back taxes, child support, or other government debts. Sometimes your refund gets intercepted for those reasons without much notification. Had this happen to me last year where my state refund was taken to cover an old parking ticket I had forgotten about.
22 Is there a way to check if this happened? I'm not aware of owing anything, but I guess it's possible something slipped through the cracks.
11 You can usually see this on your state's "Where's My Refund" tool - it would say something like "refund offset" or "refund applied to outstanding debt" instead of just "refund issued." You can also call your state's offset program directly - most states have one that handles when refunds are diverted to pay debts. If it just says "refund issued" then it's likely not an offset issue but rather something went wrong with the deposit. Another thing to consider is if you had tax preparation fees taken out of your refund - sometimes this can cause delays or issues with the final deposit.
14 Have you checked with Civista Bank directly? Sometimes banks hold tax refunds for review, especially larger ones. I had mine held for 5 business days last year for "fraud prevention" without any notification. Super annoying.
Fatima Al-Farsi
This happened to me once! Turned out my accountant from the previous year had set up a business account with my SSN, then when they were inputting 1099s, they accidentally created one from "me the business" to "me the individual" - essentially paying myself. It was a clerical error in their system. Call whoever sent you the form first. If you can't figure that out, call the IRS and explain the situation. They've seen this kind of mistake before.
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Andre Dubois
ā¢Thanks for sharing your experience! Did you have any issues with your tax filing that year? Did you need to do anything special on your return to address this duplicate 1099?
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Fatima Al-Farsi
ā¢I didn't have any issues with my filing because I caught it before I submitted my return. My accountant issued a corrected 1099-NEC showing zero payment once we figured out the mistake. If you've already filed or can't get a corrected form, you should include a written explanation with your tax return specifically addressing this error. The IRS actually has a form for this - Form 8275 "Disclosure Statement" where you can explain discrepancies. Better to be proactive than wait for them to question it.
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Dylan Cooper
Check if this might be related to any government benefits you received during COVID. There were some weird reporting requirements that confused a lot of systems. Some payment processors and accounting software had glitches where they accidentally generated 1099s with the recipient's info duplicated as the payer.
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Sofia Perez
ā¢This is good advice. I work in payroll and we saw several instances of system errors causing duplicate TINs on tax forms during the pandemic benefit period. The software sometimes couldn't properly categorize certain types of payments.
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