Yes! This happened to me too. They coded mine as a "7" (I'm over 59.5) even though it was definitely a rollover. My tax guy said the important thing is to mark it as a rollover when entering it into tax software. He said the IRS reconciles this with the 5498 form your receiving institution files showing the money went into another IRA.

Thanks for confirming! That makes me feel better. I didn't realize the receiving institution files a Form 5498 that the IRS can match to my rollover. That makes sense that there would be a paper trail on both ends. I've been keeping all my documentation just in case, but it's good to know there's an additional safeguard in the system.

Oof, that's a really good point. I had the same issue with a 401k rollover (not an IRA). Had to scramble to find extra cash to make up the withheld amount. Then had to wait for the tax refund the following year to get that withheld money back.

The key difference is that OP was a 50% owner for the ENTIRE year in question. It's not about current ownership - it's about who had ownership during the tax period being filed. The business operations during that year were under both partners, so both should have input on how those operations are reported to the IRS.

Wouldn't filing an 8082 potentially trigger an audit though? I've always heard this form raises red flags with the IRS.

Filing Form 8082 doesn't automatically trigger an audit, but it does increase the chances of your return getting a closer look. However, that increased scrutiny is often limited to the specific items you've reported inconsistently, not your entire return. The important thing is to have solid documentation supporting your position. If you're right on the merits and can back up your treatment with records and tax law, an audit shouldn't be a major concern. Many tax professionals consider it better to file an 8082 than to report income or deductions incorrectly just to match an improper K-1. The penalty for failing to file an 8082 when required can be substantial ($50 per inconsistency), plus any additional penalties if the inconsistency results in understating your tax.

I'm having this exact issue! Filed as Married Filing Jointly last year but now I'm divorced and filing as Single. Getting rejected with IND-031-04. Did changing the filing status alone fix your problem or was there something specific your preparer had to do?

The filing status change itself wasn't actually the problem - it was how the AGI was being validated. When your filing status changes, you still need to use the exact AGI from your previous return, but the system sometimes gets confused about how to match your identity with the different status. My preparer had the IRS verify my identity using additional information beyond just the AGI - they confirmed my date of birth, address, and the last 8 digits of my previous year's return. After they manually verified me in their system, I was able to e-file without issues. The rep also mentioned that entering $0 as the prior year AGI sometimes works as a bypass when there are filing status changes, but that wasn't successful in my case.

This is actually really smart. I didn't even think to check my IRS online account. Where exactly in the account can you find your official AGI? I'm logging in now but there's so many different sections.

Look for the "Tax Records" section after you log in. Then select "Transcripts" and request a "Return Transcript" for 2021. The AGI will be clearly labeled on that transcript. If you don't see it right away, search for "Adjusted Gross Income" on the page or look for line 11 from Form 1040. Sometimes the IRS makes small adjustments to returns after processing them, which can create differences between what your tax software shows and what the IRS has on record. These adjustments might be for math corrections, misapplied payments, or other technical reasons. The transcript shows exactly what's in their system, which is what the validation is checking against.

That's such a good point I completely overlooked! We're in California, so definitely have state taxes to deal with too. Would the process be similar for catching up on state returns?

The process for California is similar but has some key differences. You'll need to file the past state returns separately using California's specific forms for each tax year. California's Franchise Tax Board (FTB) has their own document retrieval system, penalties, and payment plans that are separate from the IRS. What's actually helpful is that California has an online system that's sometimes easier to navigate than the federal one. You can register for a MyFTB account to access wage information and other tax documents the state has on file. Their payment plans tend to be shorter than IRS plans though, usually 12-36 months instead of up to 72.

I'd be very cautious about those tax relief companies. What they're referring to is called an "Offer in Compromise" which is a legitimate IRS program, but most people don't qualify for it. These companies often charge thousands of dollars upfront with no guarantee of results. The IRS only accepts offers when they believe the amount offered is the most they can expect to collect within a reasonable time period. Your brother would need to prove significant financial hardship. Many of these companies take large fees and submit applications that get rejected anyway.

thanks for the info. he's been struggling with medical bills too so maybe he would actually qualify. do you know if people can apply for that offer in compromise thing without using one of those companies? I'm worried those radio ads are just scams like you're saying.

Mining is actually taxed completely differently! When you mine cryptocurrency, the IRS considers the fair market value of the coins you receive as ordinary income on the day you receive them. You have to pay taxes on that value immediately, even if you don't sell the crypto. Then, if you later sell those mined coins, you'll also have a capital gain/loss based on the difference between the value when you mined them (already taxed as income) and what you sold them for. So mining essentially creates a two-step tax situation: income tax when mined + capital gains tax when sold. This is why many miners set aside around 30-40% for taxes.

Yes! Using a crypto debit card is considered selling your crypto and then using the proceeds to buy something. Each purchase creates a taxable event. The IRS sees it as if you sold your crypto for USD first, then made the purchase.