Can you explain exactly how to get the transcript? I logged into my IRS account but got confused by all the different transcript options. Is it the "Record of Account" or the "Account Transcript" or something else?

You want to request the "Wage and Income Transcript" which shows all information returns filed with your SSN (like W-2s, 1099s, etc.) for the tax year in question. This will show exactly what the IRS has on record. Also request the "Account Transcript" for the specific tax year, which shows actions taken on your account including assessments, payments, and adjustments. These two together will give you the complete picture of what the IRS is seeing versus what you reported.

TurboTax Audit Defense does cover CP2000 notices! I used it last year when I got one. You just need to call them and they'll assign a tax professional to help prepare your response. They won't represent you before the IRS, but they'll help you figure out what documentation to send and review your response letter.

Wait - quarterly tax payments? Nobody told me about that! So I have to pay taxes four times a year now? How do I even know how much to pay when I don't know how much I'll make with DoorDash?

Yes, when you're self-employed the IRS wants you to pay taxes throughout the year, not just at tax time. It's because you don't have an employer withholding taxes from each paycheck. You estimate how much you'll make for the year and calculate your quarterly payments based on that. You can use last year's income as a basis, or if your income varies a lot, you can use the "annualized income installment method" which lets you pay based on what you've actually earned each quarter. If you use tax software, it will usually calculate your estimated payments for the next year and even generate payment vouchers.

Is it better to take the standard mileage deduction or track all your car expenses separately (gas, maintenance, etc)? I've been doing Doordash for 6 months and just writing down my miles.

Thanks for this advice! I'll ask my accountant about Form 911 tomorrow. Does filing this form have any downsides? Does it ever annoy the examiner or make them more likely to be thorough/harsh with the audit?

There are no downsides to filing Form 911. The Taxpayer Advocate Service exists specifically to help in situations like yours where normal procedures aren't working. Examiners understand this is part of the process and won't take it personally or be harsher as a result. In fact, in my experience, having TAS involvement often leads to more reasonable outcomes because it adds another layer of oversight to the audit process. The important thing is that you're demonstrating your willingness to cooperate and resolve the matter appropriately, which is always viewed favorably.

Try calling right when they open (7am Eastern I think). That's the only time I've had success. Also, don't select the option for "questions about a letter you received" because that queue is always full. Instead, choose "questions about tax law" and then just explain your situation once you get a human. They'll transfer you.

Thanks for the tip! I'll try calling at 7am tomorrow. It's crazy we have to use these workarounds just to talk to someone at the agency that's taking our money. Appreciate the suggestion about which option to select too - I've been picking the "letter" option since that matches my situation.

Thanks for the reality check. I'm guessing I'll need to reclassify it as a distribution then. Is there any downside to doing that versus a loan to shareholder? And will I get in trouble for having initially run it through the business account?

A distribution is simpler than a loan in most cases. With a loan, you need to create proper documentation, charge interest at market rates, and set up a legitimate repayment schedule - otherwise the IRS might still classify it as a distribution anyway. You won't get in trouble for the initial miscategorization as long as you correct it. This happens frequently with small business owners. Your accountant will simply reclassify the transaction properly in your books. What would cause trouble is if you tried to deduct the kitchen remodel as a business expense and got audited. By being proactive and fixing the categorization now, you're doing exactly what you should be doing in this situation.

Yeah but the IRS doesnt look at every transaction right? Couldnt they just call it "building materials" or something vague and avoid the whole issue? My brother in law does that kinda stuff all the time with his business.

How can you tell which distributions are qualified vs non-qualified? My 1099-DIV has all these different boxes and I'm never sure what they mean.

On your 1099-DIV, qualified dividends will be in Box 1b, while Box 1a shows total ordinary dividends (which includes both qualified and non-qualified). The difference between Box 1a and 1b would be your non-qualified dividends. Capital gain distributions will be in Box 2a. These are the fund's long-term capital gains that get the preferential tax rate. If the fund had to distribute short-term capital gains, those would actually be included in Box 1a as ordinary dividends, not in the capital gains box, which is why it can get confusing!

I've used TurboTax for years with my mutual funds. It works OK if your brokerage provides good 1099s with detailed cost basis info. You can import directly from most major brokerages which helps avoid mistakes. But for older funds where you've been reinvesting for 10+ years, sometimes you need to manually adjust things, which can get complicated in TurboTax.