Do you need to bring anything specific to the appointment? I'm thinking of doing this but not sure what to take with me.

You need to bring your photo ID, social security card or tax ID number, and all relevant tax documents for your situation. In your case, that would mean your original return, the completed 1040-X form you plan to submit, and all supporting documents including your W2 form. It's also helpful to bring any notices you've received from the IRS about the issue you're trying to fix. Make an appointment online or by phone before going - they don't take walk-ins anymore.

It's because the IRS systems are super outdated. They still process paper returns using technology from the 1960s. That's why there are so many weird rules about how to attach documents.

Yes, that's exactly what happens and it's called "phantom income." It's one of the downsides of partnership investments. You're taxed on your share of partnership earnings whether or not they distribute that cash to you. Think of it this way: the partnership is not a separate taxpayer - it's a pass-through entity. So when the partnership earns $100, and you own 10%, it's treated as if YOU earned $10 directly, regardless of whether they distribute that $10 to you or keep it in the business. The lockup only affects when you can withdraw your capital, not when income is recognized for tax purposes.

No, you don't get taxed twice. When you eventually receive distributions, they're generally not taxable again (assuming they don't exceed your basis in the partnership). The distribution is basically a return of capital that you've already paid tax on. Your basis in the partnership increases by your share of income (that you've already paid tax on) and decreases by distributions. This accounting mechanism prevents double taxation.

Thanks for bringing this up! 2019 was definitely my first year in the US - I arrived in August 2019 for fall semester. I'm certain I should have filed as a non-resident. I just wasn't familiar with US tax laws at all and TurboTax didn't really ask the right questions about my visa status.

Sounds like you're definitely right to amend then! Just wanted to make sure since I've seen people mistakenly amend when they were actually residents for tax purposes. For your first partial year in 2019, the 1040-NR is absolutely the correct form. Good luck with the amendment!

I amended my 2020 return last year and did get a refund! It took about 7 months to process but I eventually got a check for $642. The key was documenting everything very clearly and including all supporting materials.

That's really helpful to know, thanks! 7 months is a long time but still worth it if I get money back. Did you have to do anything special to follow up, or did they just process it without you having to check in?

Thanks for bringing this up! Would I qualify for an Offer in Compromise with only $2,400 owed? I always thought that was for people with massive tax debts. My financial situation isn't great, but I do have steady income - just not enough extra to pay this all at once.

There's no minimum amount required for an Offer in Compromise, but with only $2,400 owed, it might not be your best option. The application fee is $205 unless you qualify for low-income certification, and the process can take 6-24 months with no guarantee of acceptance. In your situation with steady income, a long-term payment plan is probably more practical. The IRS will likely approve a 72-month plan with payments around $40-50 per month on your balance. That's much easier to manage and doesn't require the extensive financial documentation an OIC needs.

This is so important. My roommate ignored a $1,500 tax bill for almost 2 years, and by the time they finally dealt with it, it had grown to over $2,800 with penalties and interest. The IRS even started garnishing their wages which was way worse than just setting up a payment plan would have been.

Thanks for this info! Did you end up filing Form 3520 for your TFSA, or did you go with just FBAR and 8938? I'm trying to understand what the majority of people in this situation are doing.

I initially filed Form 3520 for my TFSA for two years, following advice from my first cross-border tax specialist. It was a paperwork headache and added considerable complexity to my returns. After consulting with another tax professional who specializes specifically in US-Canada issues, I switched to reporting my TFSA on FBAR and Form 8938 only, with a note explaining the account's status. This professional provided me with several IRS memorandums and case examples supporting the position that most standard TFSAs don't meet the technical definition of foreign trusts requiring 3520 filing.

This is so frustrating! So even if I properly report the TFSA now, any interest, dividends, or capital gains inside it are still taxable for US purposes? That completely defeats the whole purpose of having a TFSA.