


Ask the community...
Have you checked if your ex-in-laws made errors on your previous returns? The fact that you had to file Form 8862 is a red flag that there were issues with prior year returns. The IRS might be going back and reviewing those returns more carefully. If your in-laws were claiming credits you weren't eligible for, that could explain why you're suddenly facing scrutiny. The CP22E might be related to those incorrect claims finally catching up. I'd suggest pulling your tax transcripts for the past few years from the IRS website to see if there are any patterns of questionable credits or deductions. This might help you understand if the current issue is isolated or part of a bigger problem.
I hadn't considered that my ex's family might have filed our taxes incorrectly in previous years. That's a really good point and makes a lot of sense with the Form 8862 requirement. I'm going to request my transcripts right away to check for any patterns. I'm also wondering if I should reach out to my ex about this since these were joint returns and any liability might affect both of us? Or is it better to just handle this on my own since we're no longer together?
If you filed joint returns with your ex-spouse during your marriage, you're both potentially liable for any issues on those returns. This concept is called "joint and several liability." However, there are provisions like Innocent Spouse Relief that might help if you can demonstrate you had no knowledge of errors your spouse or their family made. Regarding communication with your ex, it's generally a good idea to keep them informed since this could potentially impact them too. However, I'd suggest consulting with a tax professional before making any decisions about how to approach the IRS about joint returns. There are strategic considerations that might affect both of you, and you want to make sure you're protecting yourself first while being fair.
The CP22E notice usually means u need to respond within 30 days!! Dont miss this deadline or it gets harder to fight. Also check if the changes they made were correct? Sometimes IRS systems dont correctly match all ur documents. When I got mine they said I didn't report income from a 1099 but they were wrong...the income WAS reported just on a different schedule than they expected. Had to send proof and they fixed it. The amount they say u owe could be wrong!!
This is so true! The IRS made a mistake on my return saying I didn't report income but it was clearly on Schedule C instead of where they were looking for it. They tried to hit me with an extra $7k in taxes! Always check their work carefully.
I had this exact same issue with my husband! He claimed 8 exemptions and was getting almost nothing withheld. What finally worked for me was showing him our total tax liability from last year's return and then explaining that this amount needs to be paid somehow - either through withholding or at tax time. In our case, our total tax was about $12,000. I showed him that I had $8,000 withheld, but he only had $200 withheld, meaning we owed $3,800 at tax time. Once he saw the actual numbers and realized we were essentially giving the government an interest-free loan if we overpaid, but would face penalties if we underpaid by too much, it finally clicked. The new W-4 is actually easier because you don't have to figure out some magic number of "allowances" - you just follow the steps.
That's a great way to explain it! I'm definitely going to try this approach. Our tax liability last year was around $10,500 and I had about $9,800 withheld while he had his measly $46. We ended up owing, but it wasn't too bad since I had extra withheld from my checks. Do you know if there's a penalty for underwithholding even if you pay everything you owe by April 15th?
Yes, there can still be a penalty even if you pay everything by April 15th. It's called an "underpayment penalty" and the IRS expects you to pay your taxes throughout the year, not just at filing time. The general rule is that you need to have paid at least 90% of this year's tax liability OR 100% of last year's tax liability (110% if your income is over $150,000) through withholding or estimated quarterly payments to avoid the penalty. So if you're significantly underwithholding, you could face penalties even if you pay the full amount when you file.
One thing nobody's mentioned - check if your husband is confusing allowances with the number of dependents. A lot of people think they should put the total number of people in their household. With you, him, and 2 kids, he might have thought 4 was right and then somehow ended up putting 9? Also, if your husband refuses to change his W-4 even after you explain it, you can adjust YOUR withholding to compensate. On the new W-4, in Step 4(c), you can request additional withholding from your paychecks. It's not ideal, but it would prevent owing a huge amount at tax time.
This is exactly what happened to my coworker! He thought the form was asking for how many people were in his extended family, so he put 12 (counting parents, siblings, etc.). His first paycheck had like $3 in federal withholding and payroll had to explain the mistake.
Have you looked into if your health insurance qualifies as an HDHP (High Deductible Health Plan)? If it does, you might be eligible to contribute to an HSA which gives you a tax deduction for the contributions. For 2025, married couples can contribute up to $8,050! This is separate from how you handle the stipend income. Also, don't forget to check if you qualify for the Premium Tax Credit. Even with the stipend, if your income is within certain ranges and you bought your insurance through the marketplace, you might be eligible.
We have an HDHP with an HSA that we max out, but I'm confused about how the employer stipend affects the Premium Tax Credit. Our plan isn't through the marketplace - does that automatically disqualify us?
Yes, that's a key point I should have clarified - to qualify for the Premium Tax Credit, you must purchase your health insurance through the Health Insurance Marketplace (Healthcare.gov or your state's exchange). If you bought your insurance privately outside the marketplace, you won't be eligible for the Premium Tax Credit regardless of your income. For your HSA, you're making a smart move by maxing it out! The stipend doesn't affect your HSA contribution limits at all. You'll still get the full tax deduction for your HSA contributions even while receiving the stipend, which is one of the few "double benefits" allowed in the tax code.
Has anyone used TurboTax to handle this kind of situation with private health insurance and employer stipends? Did it ask the right questions to handle everything correctly?
I used TurboTax last year with a similar situation. It did ask about health insurance and whether I received any stipends, but I found it confusing. I had to manually make sure the stipend was included as income (mine was on my W-2 already). The medical expense deduction part worked fine though - it walked through itemizing and the 7.5% AGI threshold clearly.
Have you considered the Voluntary Disclosure Program? My father-in-law was in a somewhat similar situation. The IRS has procedures for people who want to come clean about unfiled returns. Since your dad has passed away, they might be more lenient, especially if there's no evidence of intentional fraud. We ended up only having to file 6 years back and negotiated a reasonable payment plan for what was owed.
I hadn't heard of this program. Would this still apply even though he passed away? And how did you handle estimating income when there were no clear records?
Yes, it still applies for deceased taxpayers when the estate representative initiates the disclosure. The program essentially acknowledges that you're coming forward voluntarily before any IRS enforcement action. For estimating income, we used industry standard profit margins for his type of business, looked at his living expenses and assets acquired during those years, and made reasonable estimates. We documented our methodology carefully and explained the cash-only nature of his business. The IRS was actually surprisingly reasonable once they understood we were making a good faith effort. For some years, we used Form 8275 (Disclosure Statement) to explain our estimation methods. The key was being transparent about how we arrived at the figures rather than just putting random numbers.
Just wondering... did your dad own the house he lived in? If so, did he have a mortgage or was it paid off? Sometimes property records and mortgage info can give some clues about income, at least at the time he acquired the property.
He did own his house - bought it in the late 90s and paid it off around 2003 according to what he told me. But I can't find any mortgage paperwork. That's a good idea about property records though, I should check with the county assessor's office to see what they have. That might at least give me some baseline for what he was earning back when he qualified for the mortgage.
Libby Hassan
Just want to point out something important here - be careful about how you characterize this when reporting. The IRS might view this as a form of vigilante justice or even entrapment depending on how you obtained the money. If you deliberately set up accounts to trick scammers into sending you money, that's different from simply recovering funds they tried to take from you. The distinction might matter legally. I'm not saying don't report it - definitely do! But consider consulting with a tax professional about the specific way you characterize the source of funds.
0 coins
Rebecca Johnston
•That's a really good point I hadn't considered. Would it make a difference if I initially engaged with them thinking it was legitimate and then only set up the additional accounts after realizing it was a scam? Or is the fact that I created multiple accounts specifically to collect more money the potential issue here?
0 coins
Libby Hassan
•The timing and intent definitely matter. If you initially engaged in good faith and then took defensive measures after discovering it was a scam, that's more favorable than if you sought out scammers specifically to trick them. The creation of multiple accounts specifically to collect more money could potentially be seen as moving beyond simple recovery or defense into something more deliberate. This is where the legal gray area exists. It's not just a tax question but potentially a legal one about how these funds were acquired.
0 coins
Hunter Hampton
I remember seeing a similar case on r/legaladvice where someone did this on a larger scale (like $20k) and ended up with some serious problems. The scammers actually reported them for fraud! Have you considered that these funds might be from stolen credit cards or hacked accounts? If so, those funds might legally belong to the actual victims, not the scammers or you.
0 coins
Sofia Peña
•That's a really good point! If the money came from other victims rather than the scammers' own pockets, that would basically make OP a recipient of stolen funds, right? That definitely complicates things beyond just tax reporting.
0 coins