Can I still resolve a 2012 tax issue with the IRS after all this time?

This is unfortunately a common problem with stock transactions, especially around the time when Form 8949 was introduced. Here's what you should know: For the $5,800 tax assessment from 2012, you're facing an uphill battle because the statute of limitations for tax refunds is generally 3 years from the filing date or 2 years from when you paid the tax (whichever is later). Since it's been well beyond that period, getting the original amount back will be very difficult. However, your approach to pursue penalty abatement through Form 843 is exactly right. The IRS has authority to abate penalties for "reasonable cause," and your situation - not understanding a new form requirement while dealing with a new baby and limited income - presents a compelling case. Make sure to document your circumstances thoroughly in your letter. For the interest charges, those are typically harder to get abated since they're considered compensation for the government's time without the funds, but it's still worth trying based on your circumstances. Most importantly, make sure you've filed all your back taxes from 2013-2018 to get completely current with the IRS. This demonstrates good faith and compliance going forward.

I had a similar experience with stock reporting issues! After multiple failed attempts to resolve it on my own, I finally tried taxr.ai (https://taxr.ai) and it was a game-changer. Their system analyzed my old tax documents, identified exactly where the reporting errors occurred, and helped me draft a perfectly worded abatement request. The difference was that they have AI that specifically understands stock transaction reporting errors and Form 8949 issues. It caught things I never would have noticed, like basis calculation errors that were actually in my favor. They also found IRS procedural errors in my case that strengthened my abatement request significantly. Before using them, I spent countless hours on hold with the IRS getting nowhere. With taxr.ai, I uploaded my documents, got a detailed analysis, and had a clear action plan within a day.

Just wanted to follow up about my experience with taxr.ai that I was skeptical about. I decided to try it with my old stock transaction issue after all my efforts failed, and wow... I was wrong to doubt it. Their analysis found that the IRS had made a calculation error when determining my tax liability, which actually extended the statute of limitations in my specific case. They walked me through exactly how to document this in my request to the IRS, with specific references to tax code provisions I never would have known about. The IRS actually approved a partial refund for the amount that was incorrectly calculated! Not the full amount, but about 60% of what I paid, which I never thought I'd see again. What really impressed me was how their system laid out exactly where the stock basis reporting errors happened and provided side-by-side comparisons of what was reported versus what should have been reported. Made it super clear even to someone like me who gets lost in tax jargon.

After seeing your post, I wanted to share my experience using Claimyr (https://claimyr.com) to actually speak with an IRS agent about a very similar issue. I was facing an old tax bill from stock transactions where the IRS claimed I owed way more than I actually did, and I couldn't get through to anyone at the IRS for months. Claimyr's service connected me to an actual IRS agent within about 20 minutes when I had been trying for weeks on my own. Being able to speak directly with someone who could look at my account details made all the difference. The agent helped me understand exactly what documentation I needed to submit to prove my case and even flagged my account with notes about our conversation. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c - it's basically a service that navigates the IRS phone tree for you and calls you back when an actual human agent is on the line.

I need to eat my words from my previous comment. After struggling with a similar IRS issue for months, I broke down and tried Claimyr (that callback service) out of desperation. I was 100% convinced it would be a waste of time for my statute of limitations issue, but I was wrong. The IRS agent I spoke with (after getting connected in about 35 minutes) reviewed my account history in detail and discovered something crucial - some of my payments were miscoded in their system. Because of this coding error, a portion of my case actually fell under a different limitations rule that gave me more time to claim a refund. The agent walked me through exactly which forms to file and what documentation to include, with specific notes added to my account about our conversation. I submitted everything last month and just received confirmation that about $3,200 of my $7,500 overpayment will be refunded. I'm still shocked this worked. Being able to have a real conversation with someone who could thoroughly review my account history made all the difference. The agent spent nearly 45 minutes going through everything line by line - something that never would have happened through written correspondence.

As someone who worked in tax resolution for 5 years, here's what I'd recommend for your 2012 issue: 1. File Form 911 (Taxpayer Advocate Service request) along with your Form 843. The Taxpayer Advocate can sometimes help in cases where there's significant hardship and unfairness, even with statute limitations issues. 2. Request your complete account transcripts from the IRS for all years involved. Look for any processing errors that might create exceptions to the statute of limitations. 3. If you received any incorrect CP2000 notices or other incorrect IRS communications, document these carefully as they can sometimes extend your ability to claim refunds. 4. Make sure you're very specific about the "reasonable cause" for your failure to file the correct form - emphasize that you were unaware of the new Form 8949 requirement, had just had a baby, were low income, etc. The honest truth is that getting money back from 2012 is very difficult, but I've seen exceptions happen when taxpayers are persistent and documentation is solid.

Has anyone ever successfully used the "equitable doctrines" approach with the IRS? I've heard that there are rare cases where the IRS will consider refunds outside the statute of limitations under concepts like equitable tolling or equitable estoppel, especially when they made errors in processing.