Going through this exact same thing right now! Filed about 10 days ago, got my acceptance notification within hours, but transcript page keeps showing "no record found" or whatever. It's so stressful not knowing if everything is actually moving forward properly. From what I'm reading here though, sounds like this is totally normal during tax season - the IRS backend systems are just slow to populate transcripts even after they accept your return. Still doesn't make the waiting game any easier! At least knowing other people are dealing with the same thing makes me feel less like I messed something up 😅

Ugh I'm literally going through this EXACT same thing right now! Filed about 3 weeks ago, got my acceptance notification super quick, but transcript page is still showing absolutely nothing 😩 It's so nerve-wracking because you just want some kind of confirmation that things are actually moving along. Reading all these comments though is making me feel way less alone in this - seems like the IRS systems are just painfully slow to update transcripts even after they accept returns. The waiting game is brutal but at least now I know it's normal! Thanks for posting this because I was starting to think I did something wrong with my filing 🙏

I'm a CPA and want to add some clarity to the excellent advice already given here. This 1099-NEC situation with scholarships is unfortunately becoming more common as smaller foundations use automated payroll systems that don't distinguish between contractor payments and educational grants. The foundation is definitely using the wrong form - 1099-NEC is specifically for "nonemployee compensation" where services were actually performed. Scholarships should be reported on 1099-MISC Box 1 or handled through your school's 1098-T. Here's what I recommend to my clients in this situation: 1) Contact the foundation with a written request (email is fine) referencing IRS Publication 970 and asking for a corrected 1099-MISC. Many will comply once they understand the proper requirements. 2) If they refuse, you must still report it to avoid IRS matching issues. Use Schedule 1 Line 8i "Other Income" - write "SCHOLARSHIP" next to the amount. 3) For the qualified education expense exclusion, you can either subtract it on the same line (noting "SCH EXCL") or use Form 8863 if you're also claiming education credits. 4) Never let this flow to Schedule C - that would inappropriately subject scholarship funds to 15.3% self-employment tax. Document everything: your scholarship award letter, proof of how funds were used, and any correspondence with the foundation. This creates a clear paper trail showing you handled an incorrectly issued form appropriately. The IRS understands these reporting errors happen and won't penalize you for the foundation's mistake if you report it correctly on your end.

I'm a financial aid administrator at a university and see this scholarship/1099-NEC confusion frequently. You're absolutely right to question this - scholarships should not be reported on 1099-NEC forms unless you actually provided services to earn the money. The foundation's "non-profit" explanation doesn't hold water. Many non-profits issue scholarships correctly using 1099-MISC (Box 1) or work with educational institutions for proper 1098-T reporting. They likely have an accounting firm or payroll service that automatically generates 1099-NECs for any payment over $600, regardless of the payment's actual nature. From my professional experience, here's what typically works best: 1) Contact the foundation in writing (email works) and reference IRS Publication 970, specifically the sections on scholarship reporting. Request they issue a corrected 1099-MISC instead. 2) If they refuse, absolutely do NOT ignore the form - the IRS will expect to see that income reported somewhere. Report it as "Other Income" on Schedule 1, noting "SCHOLARSHIP" next to the amount. 3) Most importantly: DO NOT let this get reported as self-employment income on Schedule C. That would subject your scholarship to unnecessary 15.3% self-employment tax. 4) Keep your scholarship award letter and receipts showing how you used the funds for educational expenses - this documentation supports any exclusions you claim. I've helped dozens of students navigate this exact situation, and the IRS has always accepted proper reporting even when the original form was incorrect. The key is handling it correctly on your end despite the foundation's mistake.

This thread has been incredibly helpful! I'm dealing with a similar situation but with an added complexity - my rental property is in a different state than where I live. I rent out a beach house in Florida for about 200 days per year and only use it personally for about 5-7 days when I visit. From what I'm reading here, since my personal use is well below both the 14-day threshold and the 10% threshold (which would be 20 days), I can treat this as a rental property and deduct 100% of my mortgage interest, property taxes, insurance, and depreciation. My question is: does the fact that it's in a different state change any of these rules? I have to file tax returns in both my home state and Florida, so I want to make sure I'm handling the rental income and deductions correctly on both returns. Also, Florida doesn't have state income tax, but I still pay property taxes there - does that affect how I can deduct the property taxes on my federal return? Has anyone else dealt with out-of-state rental properties and these vacation home vs. rental property classification rules?

I've been following this discussion and wanted to add another perspective based on my experience with a mountain rental property. The 10% rule calculation can be trickier than it initially appears, especially when you have seasonal rentals. For example, if you rent your property for only 90 days during peak season but use it personally for 15 days throughout the year, you're still over the 10% threshold (10% of 90 rental days = 9 days, so 15 > 9). This would classify your property as a vacation home even though your personal use seems minimal compared to the total days in a year. The key is that the 10% calculation is based on actual rental days, not total days in the year. So timing your personal use strategically - like using the property during off-season when you're not actively renting it - can help you stay under the threshold and maintain rental property classification. Also worth noting: if you're right at the borderline, consider whether some of your "personal" days could actually qualify as maintenance days. As mentioned earlier, legitimate repair and maintenance visits don't count toward personal use, which could help keep you under the 10% threshold.

I'm dealing with this exact same nightmare right now! Got my 5071C letter three weeks ago and have been calling that number religiously every day. The automated system just immediately says "we cannot take your call at this time" and hangs up - no hold option, no queue, nothing. What's really frustrating is that I actually need to file an amended return this year too, but I can't do anything until this identity verification mess gets sorted out. My tax preparer said this is becoming incredibly common and the IRS is just completely overwhelmed. I'm going to try some of the suggestions here - the early morning calling strategy and maybe even one of those callback services people mentioned. At this point I'm willing to try anything because I'm losing sleep over this. Thanks for posting this because at least I know I'm not the only one stuck in this bureaucratic nightmare!

I went through this exact same situation about 6 months ago and I completely understand your frustration! The 5071C verification line is notorious for being impossible to reach. Here's what finally worked for me: I discovered that the IRS actually has multiple phone numbers that can handle identity verification, not just the one on your letter. Try calling the main IRS customer service line at 1-800-829-1040 and when you get through (which is still difficult but easier than the 5071C line), explain that you have a 5071C letter and need identity verification. They can often transfer you directly to the right department or sometimes even handle it themselves. Also, make sure you're calling from the phone number that's associated with your tax return. The IRS systems sometimes flag calls from unrecognized numbers, which might be contributing to the immediate hang-ups. One more tip - if you have a tax professional who prepared your return, they might have a dedicated practitioner line they can use to help resolve this faster. It's worth asking them about it. Don't give up! I know it feels hopeless but you will eventually get through. The identity theft protection is actually working as designed - it's just unfortunately creating a huge bottleneck for legitimate taxpayers like yourself.

Don't forget to check if you qualify for any tax treaty benefits! The high-tax kickout rules still apply, but sometimes tax treaties between the US and the foreign country have special provisions about how certain types of income are categorized or credited. For example, I have income from Canada and the US-Canada tax treaty has specific rules about pensions and social security that affected how I filled out my Form 1116. Might be worth looking into depending on which country your foreign income is coming from.

Just wanted to share my experience after dealing with a similar high-tax kickout situation last year. The key thing that helped me was creating a simple spreadsheet to track each source of foreign income separately before even touching Form 1116. I listed each type of income (interest, dividends, capital gains, etc.), the country it came from, the foreign tax paid, and calculated the effective foreign tax rate for each. This made it crystal clear which items needed to be "kicked out" to general category vs staying in passive. One thing I learned the hard way - make sure you're calculating the effective rate correctly. Don't just look at the statutory tax rate of the foreign country. You need to divide the actual foreign tax YOU paid by the actual foreign income YOU received. Sometimes withholding taxes, tax credits in the foreign country, or other adjustments can make your effective rate different from what you'd expect. Also, keep really good records of your calculations because if the IRS questions your categorization later, you'll want to be able to show exactly how you determined which income belonged in which category.