Something to consider that no one has mentioned - if you're expecting to have significant income or asset gains shortly after bankruptcy (like an inheritance, insurance settlement, or work bonus), talk to your attorney about timing. My cousin filed Chapter 7, then got a $30k work bonus three months later that he had to surrender to the trustee because his case was still open. For taxes specifically, if you're expecting a large tax refund from a pending amended return or audit reconsideration, that could be considered an asset too.

I went through bankruptcy in 2022 and can share some practical advice about the tax situation. First, definitely get all your unfiled returns current before filing - the trustee will require this and it can delay your case significantly. One thing I wish I'd known earlier is about the "look back" period. The bankruptcy court examines your finances for several months before filing, so any unusual financial moves (like spending a big tax refund right before filing) will be scrutinized. My attorney advised me to file my taxes early and use any refund for legitimate living expenses rather than trying to "hide" it. Also, keep meticulous records of everything tax-related during your bankruptcy. I had to provide copies of all tax returns, transcripts, and correspondence with the IRS to my trustee. Having everything organized made the process much smoother. The good news is that once you get through it, the fresh start is real. My dischargeable tax debts were eliminated, and I was able to work out a manageable payment plan with the IRS for the taxes that couldn't be discharged. Don't let the tax complexity scare you away from getting the help you need - just make sure you work with an attorney who understands both bankruptcy and tax law.

One additional resource that might be helpful is the SEC's EDGAR database. You can search for IBM's Form 8-K filings from late 2021 which should contain the official details about the Kyndryl spin-off, including the exact distribution ratio and valuation methods used. I had a similar issue with a Verizon/Frontier spin-off a few years ago, and finding the original SEC filing gave me the definitive documentation I needed to convince my broker to make the corrections. The Form 8-K will typically include a section called "Material Agreement" or "Other Events" that describes the distribution terms in detail. Also, if you're still having trouble after trying all the excellent suggestions here, consider filing a complaint with FINRA if Fidelity refuses to correct obviously incorrect cost basis information. Brokers are required to maintain accurate records, and persistent refusal to fix clear errors can sometimes prompt faster resolution when regulatory pressure is involved. The key is being prepared with multiple sources of official documentation - the Kyndryl website allocation info, IBM's SEC filings, and any IRS forms the companies filed. Having that comprehensive paper trail makes it very difficult for a brokerage to claim the correction isn't warranted.

I just wanted to thank everyone who contributed to this thread - the collective knowledge shared here is absolutely incredible! As someone who was completely overwhelmed by this IBM/KD cost basis issue when I first posted, I now feel like I have a comprehensive roadmap for getting it resolved. The step-by-step guidance from folks who've been through the exact same situation, the professional insights from the CPA, the practical tips about timing calls to Fidelity, and the additional resources like SEC filings - this is exactly the kind of detailed, actionable advice that makes online communities so valuable. I'm planning to tackle this systematically using the approach outlined here: gather all the official documentation (IBM's spin-off materials, SEC Form 8-K, Form 8937 if available), create a detailed spreadsheet showing my original purchases and the proper 96%/4% allocation, then call Fidelity's cost basis department during off-peak hours and ask specifically about corporate action notifications for the IBM/KD spin-off. I'll definitely follow up in this thread once I get it resolved to let others know how it goes. Based on everyone's experiences, it sounds like persistence and having the right documentation should do the trick, but knowing about the FINRA complaint option as a backup is reassuring too. Thanks again to this amazing community for turning what felt like an impossible problem into a manageable process with clear next steps!

Don't forget about the Form W-9! Requiring a completed W-9 adds an extra layer of verification. If someone provides false information on a W-9, they're committing perjury under federal law, which creates a strong disincentive for scammers.

One approach that's worked well for our platform is implementing a tiered verification system. For lower-risk transactions (under $500), we rely on document verification plus state business registry checks. For higher amounts, we add banking verification and sometimes require a video call with the business owner. We use a combination of automated document analysis (similar to what others mentioned with AI tools) and manual spot-checks. The key is having clear escalation procedures - if anything looks suspicious during automated screening, it gets flagged for human review. Also worth considering: many fraudsters will abandon applications if the verification process seems thorough, even if they could potentially pass each individual check. Sometimes the perception of rigorous verification is as valuable as the actual verification itself. For the volume you're dealing with, I'd recommend starting with document + state registry verification, then adding layers based on transaction risk levels rather than trying to verify everything to the same standard.

As a fellow nanny who went through this exact confusion, I want to emphasize something really important that got buried in all the discussion about tools and classification: **start keeping detailed records NOW** regardless of how your taxes end up being filed. Track your mileage when driving kids to activities, save receipts for any supplies you buy, and document your CPR certification costs. Even if you can't deduct these as a W-2 employee, having this documentation serves multiple purposes: 1. You can present organized expense reports to your family and ask for reimbursements (which aren't taxable income to you) 2. If there's ever a question about your work classification, detailed records help prove the business nature of your expenses 3. Some states do still allow certain deductions that federal doesn't The key conversation to have with your family is setting up a proper reimbursement system. Most families are happy to reimburse legitimate work expenses - they just need you to present it professionally with receipts and clear explanations of how each expense relates to your job duties. Don't let the tax classification confusion prevent you from getting fairly compensated for legitimate work expenses!

As a tax professional who works with many household employees, I want to add some clarity to this discussion. The original poster's situation is very common, and there are some key points that will help: First, determine your correct classification. Most nannies working regularly for one family should be W-2 employees, not 1099 contractors. The IRS looks at factors like who controls your work schedule, provides equipment, and directs how you perform your duties. If you're correctly classified as a W-2 employee, you cannot deduct business expenses on your federal return since 2018. However, you absolutely should discuss expense reimbursements with your family. Items like: - Mileage when driving kids (current rate is 67¢/mile for 2024) - Craft supplies and materials for activities - Required certifications like CPR - Any special equipment or clothing needed for the job These reimbursements aren't taxable income to you when properly documented. Create a simple reimbursement request system - track expenses with receipts and submit monthly. If your family isn't providing proper tax documents (W-2) and paying employment taxes, this creates problems for both parties. They're legally required to do this if they pay you over $2,400 per year. You miss out on Social Security credits and proper employment history. Keep detailed records regardless of classification - it protects you and shows professionalism to your employer family.

OMG this EXACT thing happened to me!!! 😤 The IRS verification system is SO broken this year! I'm seeing this issue EVERYWHERE in tax groups. Here's what works: IGNORE the message disappearing and verify anyway! The verification requirement is still in their system even if it's not showing up. I was freaking out when this happened but verified with my control number anyway and got my refund 11 days later! Don't wait for the message to reappear because it probably won't. Trust me on this one! 💯

I can relate to this frustration - it's like the IRS is playing hide and seek with important notices! Based on what others have shared here, it seems the verification requirement is still active even when the message disappears from your account. Since you have the physical letter with the control number, I'd recommend proceeding with verification rather than waiting. You can go directly to idverify.irs.gov or call 800-830-5084 to complete the process. It's better to verify and potentially do it unnecessarily than to let your refund get held up for months. The consensus from everyone's experiences here seems to be that the system glitch is cosmetic - the verification hold is still there behind the scenes.