One thing to consider with an Offer in Compromise is that the IRS will file a Notice of Federal Tax Lien before processing your offer. If you're concerned about your credit, this is something to be aware of. Also, while your offer is being considered, the 10-year statute of limitations on collecting the debt is suspended. I went through this process last year. It took about 8 months from submission to acceptance. During that time, all collection activities stopped, which was a relief. My accepted offer was about 25% of what I owed, but I had to liquidate my retirement account to pay it (which hurt, but was worth it to be free of the debt). The most important advice I can give: document EVERYTHING and be 100% truthful. They will verify everything you report, and any discrepancies will get your offer rejected.

Something nobody's mentioned yet - if your OIC is accepted, you'll be on a compliance monitoring period for 5 years. During this time, you must file all required tax returns and pay all taxes on time. If you don't, the IRS can revoke the offer and reinstate the original debt minus whatever you paid. Also, any tax refunds you would receive during the calendar year that your offer is accepted will be kept by the IRS and applied toward your debt. This is in addition to whatever settlement amount you agree to pay.

Whatever you do, DO NOT ignore the CP2000 notice even if H&R Block is handling things on their end. I learned this the hard way. I had a similar situation with another tax prep company, and I assumed that since they were "taking care of it," I didn't need to formally respond to the IRS myself. BIG mistake. The IRS never received a timely response, so they processed the additional assessment, and I ended up with a tax lien that affected my credit score for years. Make sure you respond to the IRS within their timeframe even if it's just to say "I'm working with H&R Block to resolve this issue and will provide complete information by [date]." Then request an extension if needed. The IRS is actually pretty reasonable about extensions if you ask before the deadline.

I hope you took pictures of what you gave to the tax preparer! I've worked in a tax office (not H&R Block) and sometimes the preparers can try to cover themselves by saying you never provided certain documents. If you have digital copies or photos of what you submitted, that makes your case much stronger. Also check your emails - if you sent any documents electronically or if they confirmed receipt in any way, save those messages. Since the 1099-K appears on their summary sheet, that's pretty clear evidence they received it but failed to include it properly. H&R Block's Peace of Mind guarantee should definitely cover this situation since it's clearly their error. One more tip: If H&R Block tries to claim you're at fault, ask to speak to a district or regional manager. Sometimes the local office might resist paying out on guarantees, but higher-level management usually understands that honoring these guarantees is important for their reputation.

One thing nobody mentioned - make sure you organize receipts for any improvements you made to the rental room! Things like new paint, furniture for tenant use, portion of utilities, etc can be deductible against that rental income. I wasn't prepared with those at my first accountant meeting and had to schedule another appointment after digging through a year's worth of Home Depot receipts.

Don't forget to tell your tax accountant about any side hustle expenses! When I started my second job, I didn't realize I could deduct my home internet since I was using it for work. Lost out on like $600 in deductions that year :

We just implemented a hybrid approach at our company that seems to be working well. Rather than counting lines of code (which is problematic for all the reasons you mentioned), we: 1. Had each development team estimate the percentage of maintenance vs. new development for their area 2. Set up time tracking codes that developers use when logging hours 3. Created a review process where tech leads and finance meet quarterly to review the classifications 4. Document everything with written justifications for how we classified each major component Our CPA seemed satisfied with this approach, though she emphasized that we need to be consistent and have solid documentation of our methodology.

Has anyone figured out how to handle open source contributions under Section 174? Our developers contribute to open source projects as part of their job, and I have no idea if that should be classified as R&E or something else entirely.

One thing to consider - you might be able to deduct the mold inspection as a medical expense if you can document that you did it for health concerns. IRS Publication 502 covers medical expense deductions, and preventative care can sometimes qualify. You'd need to itemize on Schedule A, and only medical expenses that exceed 7.5% of your AGI are deductible. Since you're selling the property, another option is to add the cost of the mold inspection to your basis in the property, which would reduce any potential capital gains tax when you sell. Keep all documentation for this.

If the builder is asking for a W9, I'm betting they're planning to issue a 1099-MISC in box 3 (Other Income). This is their standard procedure for paying non-employees. But here's the thing - the IRS actually has guidance on reimbursements vs income. If you want to avoid the tax impact entirely, try asking the builder if they'll pay the testing company directly instead of reimbursing you. Then no W9 is needed since you're not receiving any money.