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.

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 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.

In your example, if I only can use $6,000 of the credit, do I lose the other $1,500 forever or can I carry it to next year?

Unfortunately, you lose the remaining $1,500 forever. The EV tax credit cannot be carried forward to future tax years. If you don't have enough tax liability to use the full credit in the year you purchase the vehicle, the unused portion is simply lost. This is why it's so important to understand your tax situation before making a purchase decision based on the credit.

Income itself doesn't directly determine your EV credit, but it does affect your tax liability, which determines how much credit you can use. If you make $40k, your federal tax liability might only be around $3-4k (depending on deductions, filing status, etc.), so you could only use that much of the $7,500 credit. At $100k income, your tax liability would likely exceed $7,500, meaning you could use the full credit.

Thanks for your input, but I'm actually dealing with a larger amount - the refund was around 3,800 CAD, and the exchange rate has changed enough that the loss is more than $300. I'd prefer to do things by the book, especially since I'm planning to apply for citizenship in a couple years and don't want any tax issues to complicate that.

Fair enough. For amounts over $200, it's probably worth reporting correctly. Just wanted to point out that sometimes the tax benefit isn't worth the extra paperwork, but in your case it makes sense to get it right.

That's actually a good point. I use the XE Currency app to track exchange rates and set alerts when they hit certain thresholds. CAD has been trending up a bit lately against USD compared to last year.