Thanks for pointing this out! My brother actually bought his shares in mid-2021, so it sounds like the 2022 survey period would definitely apply to his investment. Do you know if there's any grace period or process for late filing if he missed the deadline?

If your brother bought his shares in mid-2021, then yes, his ownership would need to be reported in the 2022 benchmark survey. Regarding late filing, the BEA does have a process for this. They generally encourage companies to file even if they've missed the deadline. While there are potential civil penalties for failing to file (up to $48,000), the BEA typically works with businesses to get the information rather than immediately imposing fines. Your brother should contact the company and encourage them to file as soon as possible, explaining it's better to file late than not at all. The company can also reach out to the BEA directly to explain the situation and their intention to file.

From my understanding, the structure you're describing doesn't exempt your cousin from these requirements. The BEA looks at the ultimate beneficial owner when determining foreign investment. If a foreign person owns an LLC that then invests in a C-Corp, the foreign ownership "passes through" the LLC for purposes of the BE-12 survey.

I wouldn't recommend waiting for a CP2000. They add penalties and interest from the original due date, and it could affect your credit if you don't respond promptly. Also looks bad if you're ever audited in the future since it shows a pattern of underreporting.

That's a fair point about the penalties and interest. I should have mentioned those potential costs. The penalties would likely be small on such a small amount of unreported income, but they do exist. You're right that responding to a CP2000 notice could be more stressful than just filing an amendment proactively. And while a single CP2000 notice doesn't automatically trigger an audit, multiple reporting discrepancies could potentially increase your chances of scrutiny in the future.

No, they won't just "note your account" or anything like that. You need to file the 1040-X amendment. They're very specific about following proper procedures for corrections.

Do you think it's worth paying for audit protection when using tax software? I always skip it because it seems like a waste of money given the low audit rates, but then I worry I'm being penny-wise and pound-foolish.

I personally don't think audit protection is worth it for most people. The services typically just offer to provide representation if you're audited, not to pay any additional taxes or penalties found to be owed. If you're keeping good records and not trying to push the boundaries with questionable deductions, you can usually handle a correspondence audit (the most common type) on your own by simply providing the requested documentation. I'd rather put that money toward a good bookkeeping system that helps me maintain proper records throughout the year.

Filing status itself doesn't significantly impact audit rates. What matters more is your income level, sources of income, and deductions claimed. A change in filing status might cause a letter if there's a discrepancy in reporting between you and your ex-spouse regarding dependents or shared deductions, but it doesn't inherently increase audit risk.

So how long does it typically take for the IRS to get the updated info from SSA after you get your new card? Is it immediate or is there like a delay of weeks/months?

It's usually not immediate. The SSA and IRS data synchronization typically happens within 2 weeks after your new card is issued, but in some cases it can take up to a month. However, you don't need to worry about the exact timing. Once you receive your new Social Security card with your updated name, that's your confirmation that the change is official with the SSA. For any tax filings after that point, you should use your new name as it appears on your card.

Is there any way around this? Like can she file a paper return with her married name instead of electronic filing? My sister had a similar issue.

Thanks for this suggestion! I'll definitely let him know about the EITC. Do you know what the minimum income requirement is to qualify? And would it matter that it's gig work rather than W-2 employment?

For the 2024 tax year (filing in 2025), a single person with no children needs at least $1 of earned income but cannot exceed around $17,640 to qualify for EITC. Yes, self-employment income (like from Doordash) does count as earned income for EITC purposes. The issue is that with only $230 in income, the credit would be very small, but still worth claiming if eligible.

Not a stupid question! There is a filing threshold. For self-employment income like Doordash, you need to file if you made $400 or more. Since the brother made less than that ($230), he technically isn't required to file a tax return at all unless he has other reasons to file.