Does checking box B on Form 8949 trigger any kind of audit or extra scrutiny from the IRS? I need to make this adjustment but I'm worried about raising red flags.

Checking box B on Form 8949 doesn't increase your audit risk. It's a legitimate adjustment that's specifically designed for situations like this where the reported basis is incorrect. The IRS is very familiar with RSU basis adjustments, especially for tech employees. What actually increases audit risk is not reporting these transactions properly and having discrepancies between your 1099-B and your tax return. By correctly documenting the basis adjustment, you're actually reducing your chances of future notices or audits because everything is clearly explained and properly reported.

I got first-time penalty abatement for mine last year. Call the IRS and specifically ask for "first-time penalty abatement" if you haven't had any penalties in the past 3 years. They waived about $900 in penalties for me, though I still had to pay the interest.

Is there any risk to reporting someone like this? I'm worried my provider would find out I reported her and make things difficult with my kid's care situation.

The IRS keeps information about who submitted a Form 3949-A confidential, but your provider might guess it was you if you're the only client asking for their SSN. That's the tough part about this situation. If you're concerned about retaliation affecting your child's care, you might consider looking for a new provider anyway. Someone willing to lie about income for tax purposes might not be the most trustworthy person to care for your child. In the meantime, file your taxes correctly with "REFUSED" and your proper documentation, but maybe hold off on the formal fraud report until you've secured alternative childcare if you're worried about potential fallout.

That's a really good point. In my state you can look up licensed providers on the department of human services website. I found out my kid's "daycare" wasn't licensed after a similar tax issue. Ended up reporting them and found out they had way too many kids for an unlicensed home daycare.

This makes me feel so much better! One more question - how many taxpayers should I expect to help in a typical volunteer session? I'm worried about feeling rushed or pressured.

As a new volunteer, you'll probably complete 2-3 returns in a 4-hour shift. The pace is very reasonable - quality is emphasized over quantity. More experienced volunteers might do 4-5 returns in the same time. There's no pressure to rush. If a return is taking longer because it's complicated or you're learning, that's completely normal and expected! Site coordinators understand that new volunteers need more time. The taxpayers are just grateful for the free help, and they're usually very patient.

Which sections from Pub 4012 did you find most useful to print out? I'm about to start training too and would love to know what to focus on!

Thanks for mentioning Form 4852 - I didn't know that was an option! Does it work the same for 1099-MISC as it does for W-2s? And did you still need to attach an explanation letter or did the form itself cover everything?

Form 4852 works for both W-2s and 1099s, though it's more commonly used for W-2s. The form itself includes sections where you explain the discrepancy and how you calculated the correct amount. I still attached a short explanation letter with mine just to be extra clear, along with copies of my invoices and bank statements showing the actual payments received. Better to provide too much documentation than not enough when you're contradicting what's been reported to the IRS.

I work in government accounting and can confirm this happens ALL THE TIME. Our fiscal year is different from the calendar year and our ancient software regularly messes up 1099s because of December/January payment processing. Always worth asking if this is what happened.

You know what, this might be exactly what happened! I just pulled up the previous owner's info from our closing documents and it shows they owned the home for over 30 years. They were definitely senior citizens. So their assessment might have been frozen or reduced for years while property values increased around them?

That's almost certainly what happened then. Many states have "senior freeze" programs that cap or greatly reduce tax increases for elderly homeowners, especially those who've been in their homes a long time. When the property sells, the new assessment reflects current market value without those protections. Your neighbors who haven't had recent sales might still be benefiting from various exemptions or assessment caps that keep their taxes lower. It's not that you're being targeted unfairly - you're just seeing the true current tax rate while others might be protected by various programs. Since you're relatively new owners, make sure you've applied for any homestead exemptions available in your area. You typically need to own and occupy the home as your primary residence to qualify, but it can provide significant savings.

I did my own appeal last year and got my assessment reduced by $32k! Just gathered sales data for similar homes in my neighborhood that sold for less than my assessment value. Photos help too if you have issues with your property (drainage problems, cracked foundation, etc). You def don't need a lawyer for the basic appeal process.