I've been through both state and federal audits and can share some insights. While they're not directly linked, there is information sharing between agencies through programs like the Federal/State Exchange Program. The IRS uses their own Discriminant Function System (DIF) to select returns for audit, which considers multiple factors beyond state audit results. That said, if your state audit reveals significant unreported income or suspicious patterns, it could increase your federal audit risk. My recommendation: treat your state audit seriously, maintain organized records, and respond promptly to all requests. Most importantly, if they find any errors, make sure you also file amended federal returns if needed - being proactive shows good faith and can actually reduce your audit risk. The majority of state audits result in minor adjustments or no changes at all, so try not to stress too much!

Been through this exact scenario! Had a state audit in 2021 and was terrified the IRS would follow up. What I learned is that while there's no automatic trigger, the agencies do share information through data matching programs. The good news is that most state audits are pretty routine - mine was just about some deduction documentation and got resolved in about 6 weeks with no issues. My CPA told me the IRS typically only gets interested if there are major discrepancies in income reporting or patterns that suggest tax avoidance. Keep your paperwork organized, respond to everything promptly, and try not to let the anxiety eat you alive (easier said than done, I know!). In most cases, you handle the state audit and that's the end of it. Hang in there!

I've been following this thread closely because I'm dealing with a similar 810 freeze situation. What strikes me about everyone's experiences is how inconsistent the resolution timeframes are - some people get it resolved in days while others wait weeks or months. Based on what I'm seeing here, it seems like there are actually multiple factors that can cause the 810 freeze to persist even after verification: 1) System lag between departments (as mentioned by several people), 2) Additional verification requirements beyond just ID verification, 3) Manual holds that require supervisor intervention, and 4) High processing volumes during tax season. For those still waiting like Yuki, it might be worth trying multiple approaches simultaneously rather than just waiting. The Identity Protection Specialized Unit number (877-777-4778) that NebulaNinja shared seems promising, and the idea of documenting financial hardship could help prioritize your case. I'm also wondering if there's a pattern to which verification methods (online vs phone) or which time of year leads to faster resolution? It would be helpful to track this data as a community so future people dealing with 810 freezes have better guidance on what to expect and which strategies actually work.

Based on everyone's experiences shared here, it's clear that 810 freeze codes after verification can be incredibly frustrating and inconsistent. What I'm seeing is a pattern where the IRS verification system and refund release system aren't properly synchronized, leading to these extended delays even after successful verification. For those dealing with this issue, here's what seems to be the most effective approach based on the collective wisdom in this thread: 1) Don't wait - the "system will update" response is often inadequate, 2) Call the Identity Protection Specialized Unit at 877-777-4778 early in the morning (7 AM local time), 3) Have your verification confirmation details ready and emphasize any financial hardship, 4) Ask specifically for a supervisor who can perform manual freeze releases, and 5) Consider filing a Taxpayer Advocate Service case if you qualify for hardship status. The key insight from everyone's experiences is that this often requires human intervention rather than waiting for automated systems to catch up. Given the inconsistent timeframes people are reporting (anywhere from days to months), being proactive and persistent seems to be the only reliable path to resolution.

I'm experiencing the exact same situation right now! My transcript updated with a 570 code about 2 weeks ago with no 971, and as someone who's also new to the US tax system, the anxiety has been real. Coming from a completely different tax structure where everything was much more transparent, trying to understand what these codes mean has been incredibly frustrating. What's giving me hope after reading through all these experiences is the clear pattern - it really does seem like standalone 570 codes have a strong tendency to resolve automatically within 2-4 weeks when there's no accompanying 971. The fact that we're not seeing that notice code suggests they're doing internal reviews rather than needing anything from us. I've been checking my transcript probably every other day (I know I shouldn't!), but seeing so many success stories here is helping me stay more patient. The automated verification processes definitely seem more common this year, but it's encouraging that most people are seeing positive outcomes without any action required on their part. The waiting game is definitely the hardest part when you're not familiar with how the system works, but based on everyone's shared experiences, it sounds like we're likely just caught up in routine processing delays. Thanks for starting this thread - it's been incredibly helpful to know we're all navigating this uncertainty together!

I'm currently dealing with this exact same situation! My transcript updated with a 570 code about 6 days ago with no 971, and as someone who's also navigating the US tax system for the first time, I completely understand that overwhelming feeling of trying to decode what all these numbers mean. What's been incredibly reassuring after reading through everyone's experiences here is seeing such a clear and consistent pattern - standalone 570 codes (without the 971) seem to have a really high success rate of resolving automatically within 2-4 weeks. The key insight that keeps coming up is that when the IRS actually needs documentation or has serious concerns, they typically generate that 971 notice code right away alongside the 570. I've definitely been guilty of checking my transcript way too frequently (probably every other day despite telling myself to be patient!), but seeing all these shared success stories from people who've been in our exact situation is really helping me stay more optimistic. The automated verification processes seem to be much more common this filing season, but the good news is that most people are seeing them clear up without any action required from us. Coming from a different tax system where everything was much more straightforward and predictable, this waiting game is definitely stressful when you don't know what's happening behind the scenes. But based on all the experiences shared in this thread, it really sounds like we're just caught up in routine internal reviews rather than anything serious. Thanks for starting this discussion - it's been so helpful to see that we're not alone in trying to navigate this confusing process! The community support here is amazing, and I'm hopeful that both of our 570 codes will resolve soon.

I had a very similar experience with AMC around the same time period! Lost about $500 on that investment after the reverse split mess. One thing I learned that might help others reading this thread: make sure to keep screenshots or printed copies of your original trade confirmations, especially for meme stocks that went through corporate actions. I almost lost my documentation when my old brokerage account got closed, and those records ended up being crucial when the IRS questioned my cost basis calculation during a random review. Also, for anyone dealing with multiple reverse splits or other corporate actions, I found it helpful to create a simple spreadsheet tracking the original purchase price, number of shares, split ratios, and final sale details. It makes the math much clearer when you're doing your taxes and gives you a clean paper trail if needed. The $602 loss you calculated is definitely correct based on what you described. At least we can take some comfort in knowing these losses help reduce our tax burden!

I went through a very similar AMC situation and can confirm what others have said - your $602 loss calculation is absolutely correct. The reverse split doesn't change your total investment amount, just the number of shares and per-share basis. One thing that helped me was calling my broker (Schwab) directly to verify the cost basis on my 1099-B was calculated correctly after the split. They walked me through exactly how they adjusted the numbers, and it matched my own records perfectly. Most major brokers handle these corporate actions properly now, but it's worth a quick verification call if you're unsure. The good news is that $602 short-term capital loss will definitely help offset other gains or reduce your taxable income. I know it stings losing money on what seemed like a "sure thing" at the time, but at least the tax benefit softens the blow a bit. Lesson learned about doing our own research instead of taking family stock tips!

I'm dealing with a similar situation right now with our LLC dissolution. One thing that's been crucial is making sure you have proper documentation for the loans versus capital contributions distinction. The IRS scrutinizes this heavily during partnership audits. For Mike's situation, if the loans were truly loans (not disguised capital contributions), he should be able to claim a business bad debt deduction when it becomes clear the partnership can't repay. The key is proving there was a genuine debtor-creditor relationship with expectation of repayment. A few practical tips from my experience: 1) Get written confirmation from your accountant that the business is insolvent and unable to pay its debts, 2) Document any collection efforts made (even if unsuccessful), and 3) Make sure the loans were consistently treated as debt on your books throughout the partnership's existence. The timing of the bad debt deduction is also important - it should be claimed in the tax year when the debt becomes worthless, which might be before you file the final 1065 if insolvency is already established.

I'm currently going through a similar partnership dissolution and wanted to share some insights about the partnership's side of this equation. While everyone's focused on Mike's bad debt deduction (which is correct), don't forget that the partnership itself may need to report cancellation of debt income if the loans are forgiven. However, since you mentioned the partnership is insolvent, you'll likely qualify for the insolvency exclusion under IRC Section 108. This means the partnership won't owe tax on the forgiven debt as long as you can demonstrate that total liabilities exceeded total assets immediately before the debt cancellation. You'll need to file Form 982 with your final 1065 to claim this exclusion. Make sure to prepare a balance sheet showing the partnership's insolvency - this documentation will be crucial if the IRS questions the exclusion. The timing matters too: the insolvency test is applied immediately before each debt cancellation, so if you're forgiving multiple partner loans, document the financial position before each forgiveness. This is often overlooked in partnership dissolutions, but getting it wrong can result in unexpected tax liability for the partnership even when it has no assets to pay with.