We haven't received any official letters from the IRS about this yet. Our accountant just called saying his contact at the IRS mentioned there's some kind of "hold" on our claim during a call about something totally unrelated. Super frustrating to get such vague information! We're filing Form 843 to try to get some interest on the delayed amount, but not sure if that will just complicate things further.

That's pretty typical unfortunately. The IRS is seriously understaffed for handling ERC claims, especially the larger ones that get flagged for review. I wouldn't recommend filing Form 843 while your claim is still pending - that could actually create a duplicate file in their system and potentially cause more delays. What worked for us was having our accountant file Form 911 (Taxpayer Advocate Service request) after the 9-month mark, which at least got us assigned to someone who could provide updates.

This is super important! My accounting firm has seen a huge difference in processing times between clients who received earlier ERC payments versus those filing for the first time in 2022-2023. First-time claims over $200k are getting flagged for manual review almost automatically now.

Did the enrolled agent help negotiate a lower amount overall or just handle the payment plan? Wondering if it's actually possible to get the IRS to accept less than what they say you owe.

The EA didn't get the actual tax amount reduced - that's rarely possible unless there are actual errors in how your tax was calculated. What they did get reduced were the penalties, which in my case had added about $7k to my original tax bill. They managed to get about $5k of those penalties removed through the first-time penalty abatement program and reasonable cause arguments. They also made sure I was claiming all legitimate business deductions that I had missed on my original filings, which lowered the taxable income and therefore the tax due. This is different than "negotiating" with the IRS - it's just proper tax preparation that I had failed to do correctly.

I tried for an OIC but got rejected. They look at your income, expenses, assets... basically if they think you CAN pay (even over time), they won't accept less. Those radio ads are super misleading. Like 40% of OICs get accepted, and usually for people with serious hardships or very little income/assets compared to their debt.

Thanks for sharing your experience. That's pretty much what I suspected - those ads do sound way too good to be true. I guess I'll look more into payment plans instead since I do have a steady income. Did you end up with an installment agreement after your OIC was rejected?

That's incredibly frustrating to learn! I had no idea there was actually a proposed system that got killed by industry lobbying. I just looked up that ProPublica article and wow... the fact that other countries have been doing this for decades while we're stuck manually entering numbers that the government already has is ridiculous. Do you know if there's any movement to revive this idea? Seems like the kind of common sense thing that both political parties could potentially get behind.

There have been several attempts over the years, most recently the Tax Filing Simplification Act that's been introduced a few times but hasn't passed. The current administration has made some promises about simplifying the tax filing process, but meaningful change faces the same powerful lobbying obstacles. The Free File agreement was actually modified in 2019 after the ProPublica reporting, removing the provision that explicitly prevented the IRS from creating its own system. That's a start, but there's still strong resistance. The best hope is continued public pressure and awareness - the more people understand that better options exist and are being deliberately blocked, the more momentum builds for change.

This makes me want to move to Australia just for the tax system lol. Do they at least buy you dinner before they take your money? The US system is just insult to injury - "figure out how much you owe us or go to jail, but also we won't make it easy, and ps we already know the answer.

Thanks for mentioning this! If I do sell, is there any problem with just putting that money into a total market index fund instead? Or would that still trigger this wash sale thing?

Putting the money into a total market index fund would be perfectly fine and wouldn't trigger the wash sale rule. The rule only applies to "substantially identical" securities, which a diversified index fund definitely is not compared to an individual stock like Mullen. This is actually a smart strategy many investors use - they harvest the tax loss from individual stocks or sector funds, then immediately reinvest in broader index funds to stay invested in the market while avoiding wash sales. Just make sure you don't buy back into Mullen or any security that's too similar to it within that 30-day window before or after your sale.

This is actually brilliant advice that most people overlook. The 0% capital gains bracket is massively underutilized. I did exactly this last year when I was between jobs.

Thanks for this advice. My income has actually decreased quite a bit since 2022 (lost my higher paying job). Would that potentially help me qualify for an Offer in Compromise? And is that something I can apply for myself or do I need a professional?

Yes, a significant decrease in income could definitely help qualify you for an Offer in Compromise. The IRS looks at your current income, expenses, asset equity, and future earning potential to determine if you can reasonably pay the full amount owed. You can absolutely apply yourself using Form 656, though it's a complex process requiring detailed financial documentation. There's a $205 application fee, but it's waived if you meet low-income certification guidelines. If you decide to go this route, be extremely thorough with your financial information. The IRS rejects most offers that are incomplete or don't accurately reflect your ability to pay. There are good resources on the IRS website to help you through the process if you want to try it yourself.

Did they charge you a lot in penalties? I'm in a similar situation and worried about how much extra I'll end up owing beyond the original taxes.