Thanks for mentioning the code M thing - I had no idea about that. Is that something I need to include in my response to the CP2000, or is that only relevant for filing my tax return?

For responding to the CP2000 notice, you don't necessarily need to reference code M specifically, but it's helpful to understand that's how it should have been reported. What's most important for your CP2000 response is to clearly show your original cost basis for the CERN shares and the conversion value. If you're disputing the amount on the CP2000, you'll want to complete the response form they provided, attach your supporting documentation from Morgan Stanley showing your purchase history and the conversion details, and provide a clear explanation of why you believe the notice amount is incorrect. If you're not disputing the amount and just paying it, you can simply follow the payment instructions.

This is really good advice. I went through a similar situation with Adobe acquiring another company and initially got a CP2000. After digging through all the paperwork, I found documentation that it qualified as a tax-free reorganization. Saved me thousands in unexpected taxes!

So wait, if your amended return actually gets processed and accepted, you have to keep amending going forward? You can't just call the IRS and say "nevermind, use my original"? That seems weirdly inflexible.

Exactly - once the IRS processes and accepts an amended return, it becomes your official return of record. Your original return is essentially overwritten in their system. The IRS doesn't have a "just kidding, go back to the original" option. They can only move forward with processing additional amendments. It's one of those bureaucratic things that makes sense from a record-keeping perspective but is super frustrating for taxpayers who realize they made a mistake on their amendment.

I ignored a rejected amended return in 2023 and nothing bad happened. My original return remained in effect, got my refund from that with no delays, and never heard anything from the IRS about it. Just make sure you actually got a formal rejection and not just a math error notice or something else.

Thank you for this heads-up! The funds did go directly to my bank account, not to providers. Do you know what specific documentation your sister needed to provide to resolve the issue? Did she need anything from the crowdfunding platform itself?

She needed to provide a few things to resolve it. First, she printed out the crowdfunding campaign page showing it was clearly for medical purposes. She also created a spreadsheet showing all the medical bills paid with the funds, along with copies of those bills and payment receipts. She didn't need any special documentation from the platform itself, though she did include the statements showing the transfers to her account. The most important thing was demonstrating the money was both received and used for the stated medical purpose. She wrote a simple letter explaining the situation and attached all this documentation. It took about 8 weeks, but the IRS eventually closed the case without requiring any taxes to be paid.

I went through this with TurboTax last year after my son's fundraiser. There's actually no place to report gifts you RECEIVE on your tax return since they're not taxable to you. TurboTax might ask if you received gifts over the annual exclusion amount, but that's just asking if someone needs to file a gift tax return (the giver, not you). The only exception would be if you received interest on the money after depositing it - then you'd report that interest income, but not the gift itself. Just keep good records of everything in case of questions later!

Thanks for mentioning VITA! I had no idea my school might offer that. Do they help with multiple years of back taxes though? And do you know if I need to make an appointment or can I just walk in during tax season?

Most VITA programs can help with back taxes, especially for relatively straightforward situations like yours. They typically handle the current tax year plus previous years. The IRS provides VITA volunteers with training for handling back tax returns. You'll definitely need to make an appointment, especially for multiple years of taxes. These services get extremely busy during tax season. I'd recommend calling your university's financial aid or student services office now to find out when their VITA program starts accepting appointments for the 2025 filing season. Some programs start booking as early as January, and slots fill up quickly!

One thing to add - if the amount you owe is under $10,000 and you can pay it off within 3 years, the IRS generally automatically approves payment plans. You can set it up online without even having to talk to anyone.

Should I mention that I actually did try to file through a relative but they messed it up? My situation was similar - I was hospitalized for 2 months and asked my brother to handle my taxes, but he completely forgot until after the deadline.

Yes, definitely mention that you took reasonable steps by asking your relative to help. That shows you recognized your tax obligation and actively tried to meet it despite your hospitalization. Explain that you delegated this responsibility while you were unable to handle it yourself, which demonstrates your intent to comply. Make sure to emphasize that you made what you believed was a reasonable arrangement given your medical situation, but circumstances beyond your control still prevented timely filing. The IRS is generally understanding when you can show you made good faith efforts to comply despite serious limitations.

TurboTax has a feature that helps identify if you qualify for penalty abatement and gives you guidance on requesting it. I used it last year after missing a deadline due to a family emergency, and it made the process pretty straightforward.