What kind of reasons can you give for an appeal? Do you have to have some special circumstances or can anyone file one?

You don't need special circumstances to request a Collection Due Process (CDP) hearing - it's your right after receiving a final notice. You can appeal based on procedural issues (like if you believe you don't actually owe the tax), propose alternative collection methods (like an installment agreement), or claim financial hardship. Even if you know you owe the tax, requesting a CDP hearing buys you time to get your finances in order while collections are paused. During the hearing, you can propose an installment agreement, an Offer in Compromise, or request Currently Not Collectible status. The important thing is that it stops the immediate threat of a levy while you work things out.

What happened after they took the money? Did they keep coming after you for more or was that the end of it?

Did you use a CPA or did you handle the amendment yourself? I've heard different things about whether professional preparation makes a difference in how returns get processed.

We used the same CPA who did our original return. He basically said the same things others have mentioned here - that reducing income isn't typically as concerning to the IRS as increasing deductions would be. He did recommend we include a clear explanation letter that he drafted, which specifically explained the exact nature of the accounting error (duplicate counting of specific transactions) and referenced our supporting documentation. I think having that professional guidance did help give us peace of mind, but from what I've learned, the risk was probably low either way.

Good point! I made this exact mistake a few years ago and got hit with a state penalty even though I fixed the federal return properly. The states don't automatically get notified when you amend your federal return.

How long does Currently Not Collectible status typically last? Will interest and penalties continue to add up during that time?

Currently Not Collectible status doesn't have a fixed duration - it lasts until your financial situation improves. The IRS will periodically review your case, typically every 1-2 years, to see if your income has increased enough to resume payments. Some people remain in CNC status for many years if their financial hardship continues. Yes, unfortunately, interest and penalties do continue to accrue while you're in CNC status. The debt isn't forgiven - collection activity is just paused. However, there's an important benefit: the 10-year statute of limitations on collecting the tax debt continues to run during this time. So if your boyfriend's financial situation doesn't improve significantly for several years, some or all of the debt might expire before the IRS can collect it.

This is really good advice. The IRS takes worker misclassification seriously. I had a "contractor" job years ago where I was clearly an employee - set hours, company equipment, direct supervision. Filed SS-8 and got about half my tax bill wiped out!

When I did an OIC a few years ago, my credit actually improved because the tax lien was removed after acceptance. The IRS files a Notice of Federal Tax Lien when your tax debt gets high enough, and that definitely hurts your score, but once your OIC is accepted and paid, they remove it.

The documentation was definitely the most time-consuming part! Here's what I had to submit: I filled out Form 656 (the actual Offer in Compromise) and Form 433-A (Collection Information Statement). For the 433-A, I had to provide three months of bank statements for all accounts, pay stubs, proof of all my expenses (rent receipts, utility bills, car payment, insurance, medical expenses, etc.), and verification of any assets I owned. The key was being super detailed about my expenses and making sure I had documentation for everything. I also included a hardship letter explaining why I couldn't pay the full amount - in my case, ongoing medical expenses and reduced income due to changing jobs. One thing that really helped was organizing everything by category and creating a cover sheet for each section. The IRS examiner who called me actually commented on how well-organized my submission was and said that made their job easier. Honestly, it's a lot of work, but for me, getting rid of $27k in tax debt for $500 was absolutely worth the effort!

Thanks for bringing this up! I completely forgot about the childcare expenses. I've been paying for after-school care since we separated. Is there a specific form I need for the childcare credit? And does it matter if we've been splitting these costs or just whoever claims the dependent gets the credit?

You'll need Form 2441 for the Child and Dependent Care Credit. Generally, only the parent who claims the child as a dependent can claim this credit. However, there's a special rule for divorced/separated parents where the custodial parent can claim the credit even if they release the dependency exemption to the non-custodial parent. For expenses you've split, typically only the parent who claims the child can claim the credit for the expenses they personally paid. You can't both claim the same expenses. Keep good records of all payments you've made for childcare, including receipts with the provider's name, address, and tax ID number (EIN or SSN).

Yep, ran into this exact problem. My ex itemized without telling me, so I had to itemize too even though standard would've been better for me. Ended up paying way more in taxes that year. Communication is key, even if it's just through your lawyers.