Thanks for sharing this! Do you remember how long it took after you filed the missing year for them to release your refund? And did you end up owing anything for the year you missed?

It took about 3 weeks after I submitted the missing return for them to release my refund. I actually ended up with a small refund for the missed year too, so they combined them. I did get hit with a failure-to-file penalty though, even though I was due a refund. It wasn't huge but still annoying - I think it was the minimum penalty amount. The letter explained that the penalty applies for filing more than 60 days after the due date, even if you're owed money.

How do you get that transcript thing? Is it online or do you have to call them?

You can get it online through the IRS "Get Transcript" tool on their website. You'll need to create an account if you don't already have one, and they have a pretty strict verification process with multiple authentication steps. If you can't verify your identity online (which happens a lot), you can also request it by mail using Form 4506-T. That takes about 10 days to arrive. The transcript will show all income documents that were reported to the IRS under your SSN for that tax year.

That sounds like a good option! How did you find them and was there a long wait time to get an appointment? I'm wondering if they're available year-round or just during tax season?

I found my local VITA site by using the IRS's locator tool on their website - just search "VITA locator IRS" and it should come up. The wait time varies depending on the time of year. During tax season (January-April), it can be 1-2 weeks for an appointment, but they often have walk-in hours too. Most VITA sites are only open during tax season, typically January through April 15th, with some sites remaining open until October for extension filers. A few larger sites in major cities operate year-round, but they're the exception. If you're outside tax season, you might want to call ahead to check if any sites in your area are still operating.

I used a Certified Acceptance Agent last year and it was worth every penny. Paid $150 but they handled everything - verified my documents, made sure my W-7 was filled out correctly, and submitted everything together with my tax return. Got my ITIN in about 6 weeks with zero hassle. Just make sure you find one that's actually IRS-authorized! You can check on the IRS website for legitimate CAAs.

Can you explain more about this step transaction thing? If the kids become legitimate partners with economic risk, why would the timing matter? Seems like as long as they're real partners with real rights the IRS shouldn't be able to collapse anything?

The step transaction doctrine is an IRS principle that looks at the substance over the form of a series of related transactions. Even if each step is technically legal, if the IRS determines they were pre-planned steps to achieve a tax result that wouldn't be available if done directly, they can collapse them into a single transaction. For family LP transfers specifically, if you gift LP interests to your kids and then the partnership sells the property shortly after, it can appear that the only purpose of bringing them in was to split the capital gain among more taxpayers. This is especially true if there were discussions about selling before the transfer of interests. The key is establishing that each partner has legitimate economic risk and that the transfer of interests had independent business purpose beyond just tax savings. Documentation of meetings, legitimate business reasons for the transfers, and allowing time between transactions all help demonstrate these weren't just predetermined steps in a tax avoidance scheme.

Yes, a CRT can work with property held in an LP, but it gets complicated. The LP would typically distribute the property to the partners first, then the partners would contribute their interests to the CRT. The main benefit is you avoid immediate capital gains tax on the appreciation when the property is sold inside the CRT.

That's really interesting about the accountable plan! I've never heard of this before. Do you know if there's a specific way I should approach HR about it? Is there any official documentation I can refer to when explaining this?

The best approach is to frame it as a win-win for both you and the company. When you talk to HR, mention that accountable plans are recognized by the IRS and allow the company to deduct these business expenses while providing tax-free reimbursements to employees. For documentation, refer them to IRS Publication 463, which covers accountable plans. You could also point out that many companies are implementing these plans specifically for remote workers since the pandemic. I created a simple one-page proposal explaining the basic requirements: proper business connection, timely substantiation of expenses, and returning excess amounts. My HR was actually grateful since other employees had been asking about similar arrangements!

That's actually a really smart approach. What kind of documentation did you need to provide for the Lifetime Learning Credit when using your home office equipment for courses? Did you have to get anything from the course providers?

Do you think this rises to the level of actual fraud though? I mean, she did provide incorrect information, but is misreporting health insurance coverage really something they prosecute for? I'm trying to gauge how serious this is.

It likely wouldn't rise to the level of criminal prosecution unless there were other serious issues with the return. The key distinction is between a mistake and willful misrepresentation. If she knowingly provided false information, that technically constitutes fraud, even if the direct financial impact is minimal. That said, for just health insurance misreporting without tax impact, the practical risk is relatively low. The IRS has limited resources and focuses enforcement on cases with significant revenue impact. Still, the safest approach is filing an amended return with the correct information to avoid any potential issues.

That's a really good point. I had a completely accurate return last year that took over 8 weeks, and I got no explanation. My friend filed the same week and got his refund in 10 days. The systems seem pretty random sometimes.