Dependent Care FSA and Form 2441 - What's Required When Daycare Disappears?

Thanks for this info. Quick follow-up question - will writing "PROVIDER REFUSED" trigger any red flags or increase my chances of being audited? Also, if I only used the dependent care FSA for this one provider that's now gone, should I just not use the FSA funds at all next year to avoid this hassle?

Using "PROVIDER REFUSED" does not automatically trigger an audit. The IRS understands this situation happens, which is why they provide this option. They're more concerned that you actually had legitimate childcare expenses than they are about tracking down every provider. Regarding future FSA use, I wouldn't let this one experience discourage you. The Dependent Care FSA still offers valuable tax savings. For next year, just verify that any provider you use has proper tax identification before you start. Most legitimate daycare operations, licensed providers, and even many in-home daycares will readily provide this information because they're used to parents needing it for tax purposes.

That sounds promising! Did it actually help with the specific issue of a provider who completely disappeared? My daughter's summer camp closed with no forwarding info, and I'm worried about the same problem.

I'm a bit skeptical about using these tax tools. Couldn't you just check the IRS website for free? Also, how does it handle situations where you literally have zero contact information anymore for the provider?

It absolutely helped with my disappeared provider situation. The tool has a specific workflow for providers who have closed or can't be contacted, including documentation templates and exactly what to write on Form 2441. It saved me hours of research and worry. The IRS website has general information, but it doesn't walk you through your specific situation step-by-step with your actual documents. What made taxr.ai different was that it analyzed my specific receipts and flagged the missing info, then created a personalized solution. For providers with zero contact info, it creates documentation of your reasonable attempts to obtain information, which is what the IRS actually requires.

How does this even work? The IRS phone lines are notoriously impossible to get through. Are you saying this service somehow jumps the queue? That seems too good to be true.

Yeah right. I've spent HOURS on hold with the IRS and nobody can magically fix that problem. This sounds like a complete scam to me. Even if you do get through, the IRS reps give different answers depending on who you talk to.

It doesn't jump the queue - it uses an automated system that continuously redials until it gets through, then calls you when it has an IRS agent on the line. It's basically doing the waiting for you so you don't have to sit with your phone on speaker for hours. When you do get connected, it's just a normal IRS representative. You're right that different reps sometimes give different answers, but I found that actually speaking with someone was hugely helpful for my specific Form 2441 situation with missing provider information. They walked me through exactly what I needed to document and how to handle it on my return. Much better than trying to interpret the instructions myself.

That's a brilliant idea! Do you need the actual physical address to search county records? The daycare my kids went to operated under a different name than what was on the building (it was like "Sunshine Learning" but the business name was something completely different).

You usually just need the business name to search county records, though having the address helps narrow things down if there are multiple businesses with similar names. If the name on the building was different from their legal business name, try searching both. You can also try searching by the address itself, as most county business license databases allow searching by location too. Some counties even have map-based interfaces where you can click on the property and see what businesses are registered there. It's worth checking your state's Secretary of State business entity search as well, which often contains EINs for registered businesses.

Oh no, that sounds scary. Did you end up having any issues with your own taxes after that happened? I'm in a similar boat with a daycare that just vanished overnight.