Interesting idea but isn't that overkill for what could just be a mistake? And would the IRS even care if the error results in people overpaying taxes rather than underpaying?

The IRS actually does care about systematic errors regardless of direction - their mandate is correct tax administration, not just collecting maximum revenue. Errors that cause overpayment can still trigger interest payments from the government and create unnecessary processing of amended returns. You might be right that it's overkill if this is truly just an isolated error. But based on the OP's description of being stonewalled for months despite acknowledgment of the error, I suspect this might be a more widespread issue. Brokerages have a legal obligation to report accurately, and the persistence of the problem suggests either incompetence or systemic issues in their reporting systems.

This is great insider knowledge - thank you! I'll definitely try the compliance department approach. Should I send this via certified mail or would email be sufficient? And is there specific language I should include to make sure it gets proper attention?

Certified mail with return receipt is best - it creates a paper trail that can be important if you need to escalate further. Email is okay as a follow-up but not as your primary communication. Use this language in your subject line: "FORMAL COMPLAINT: Regulatory Reporting Violation - Incorrect 1099 Tax Reporting." In the body, start with "This serves as a formal complaint regarding inaccurate tax reporting that violates IRS regulations for 1256 contract treatment." Then clearly outline the specific issue with your 1099, the dates you've attempted resolution, and names of people you've spoken with. Include a specific deadline (15 days is standard) and explicitly state that you will be filing regulatory complaints with FINRA, the SEC, and your state securities division if not resolved by that date. End with "I expect acknowledgment of this complaint within 3 business days.

Thanks for this reminder about the tax treaty! I'm from Singapore and I believe there is a tax treaty. Do you know if I need to file any special forms to claim tax treaty benefits? And how exactly do I track my physical presence - is there an official way to document this?

You would need to file Form 8833 to claim tax treaty benefits. This form reports treaty-based positions that affect your tax liability. For Singapore specifically, the treaty has provisions covering business profits, but you need to determine if your income qualifies under the permanent establishment rules. For tracking physical presence, I recommend keeping a detailed log of all your international travel. Save boarding passes, entry/exit stamps in your passport, and any other travel documentation. The IRS doesn't provide an official tracking method, but during an audit, they may ask for proof of your whereabouts. Some people use apps like TravelTracker or Taxday to help with this. The important thing is to have documentation of every day you were outside the US.

This is a really important point. I have a Delaware LLC but live in California, and I got hit with a surprise $800 minimum franchise tax my first year because I didn't understand the state requirements were different. OP should definitely check Texas requirements even though they don't have state income tax.

Does FreeTaxUSA handle other complex situations well? I've got multiple W-2s, 1099s, and some investment income. Been hesitant to switch from H&R Block despite these issues.

In my experience, FreeTaxUSA handles complex returns surprisingly well. I have W-2 income, several 1099-NECs from freelance work, investment income from multiple brokerages, and even some foreign income. It walked me through everything clearly and let me review the actual forms before filing. The biggest difference I noticed is that FreeTaxUSA seems to calculate things more accurately when you have multiple income sources. The Schedule 3 excess Social Security tax was calculated correctly, and it even caught a credit H&R Block missed the year before. The interface isn't as pretty as H&R Block, but the calculations seem more reliable, especially for situations like yours with multiple income sources.

I got an adjustment letter about 6 weeks after filing. They reduced my refund by the exact amount that was incorrectly claimed as excess Social Security tax on Schedule 3, line 15. The letter was pretty clear about what they changed and why. Return was processed normally after that, just with the smaller refund amount.

What about for tax planning for the future? I've got a small business that's starting to do well, and I'm wondering if I should be talking to someone about the best way to structure things for tax purposes before it gets bigger.

For forward-looking tax planning with a growing business, I'd actually recommend starting with a CPA who specializes in small businesses. They can help with immediate tax optimization strategies and basic business structure advice. As your business grows more complex or if you're considering significant changes like bringing on investors or expanding internationally, that's when adding a tax attorney to your advisory team makes sense. The attorney can help with more sophisticated legal structures and contracts that have tax implications while ensuring you're protected legally in other ways too.

That's really good to know! I hadn't considered someone might have both credentials. Do you find that having someone with both qualifications costs more than just a regular CPA for standard tax prep?

For standard tax prep, professionals with both credentials do tend to charge more than a typical CPA - I pay about 25% more than friends who use regular CPAs. However, I don't think it's necessary to pay that premium for straightforward tax preparation. Where I've found the dual credential valuable is for ongoing tax planning throughout the year. My situation includes a small business, rental properties, and some international income, so having someone who understands both the accounting and legal implications has helped me make better strategic decisions and avoid costly mistakes. For simpler situations, a good CPA alone is probably sufficient.

That's really disappointing to hear but makes a lot of sense. Do you know if there's anything Virginia residents can do to push for inclusion in the program? Should we be contacting state representatives or something?

Yes, contacting your state representatives is definitely the most effective approach. Let them know you want Virginia to join the IRS Direct File program for the next tax season. Specific requests like this can gain traction, especially if many constituents express interest. Additionally, you can submit feedback directly to the IRS about your interest in having the program expanded to Virginia. While the IRS doesn't make the final decision on state participation, documented public interest helps build the case for expansion.

I used FreeTaxUSA last year and the federal was completely free, but they charged about $15 for state filing. Still way cheaper than TurboTax or H&R Block though! I think some of the other IRS Free File partners might offer free state filing if your income is under a certain amount (maybe $73k?).