Got 420 Audit Code on Transcript - Should I Amend for Missing 1099 or Wait?

Ah, the infamous 420 code - not nearly as fun as it sounds! 😂 Here's what's happening: The IRS has flagged your return for examination, but they haven't issued a notice yet, which makes me a bit nervous about your timeline. Generally, I'd recommend waiting for the official notice before taking action. The IRS might just make an adjustment based on information matching (they got the 1099 info from the payer). If they do send a notice, it will specify exactly what they're questioning, which could be the missing 1099 or something else entirely. Amending now without knowing the full scope might just complicate things.

I'm wondering if perhaps you could check a few additional details on your transcript that might provide more context? Sometimes, there are accompanying transaction codes that could potentially indicate whether they're simply planning an adjustment or possibly a more comprehensive examination. In particular, you might want to look for code 922 (information return processing) or possibly code 570 (additional account action pending), which could suggest they're just processing the missing income rather than initiating a full audit. Would you mind sharing if there are any other codes present that might help clarify the situation?

Don't you think waiting could just make things worse? The interest is already ticking from the original due date! I'm dealing with something similar and every day of waiting means more money out of pocket. Have you calculated how much extra you might owe with the missing 1099 income? The sooner you address it, the less you'll pay in penalties and interest - those add up fast when you're dealing with gig work income that might push you into a different tax bracket.

I'm not sure if this would help in your situation, but I've heard that getting through to the IRS directly might provide some clarity... I recently learned about a service called Claimyr (https://claimyr.com) that might be worth considering if you want to speak with an agent. From what I understand, they can help you connect with an IRS representative much faster than waiting on hold yourself. Maybe an agent could tell you if there's already a notice being processed that hasn't shown up in your account yet? Or perhaps they could confirm whether the issue is definitely the missing 1099 before you go through the trouble of amending?

I'm not convinced waiting is the best approach. What if there's something else going on besides the missing 1099? By the time you get the notice, you could be weeks deeper into penalties and interest. I've always found being proactive with the IRS pays off. Wouldn't filing an amendment now show good faith effort? I appreciate everyone's insights, but I think addressing the known issue head-on might be the better strategy.

Been there. Done that. Got the IRS letter. Here's what happened to me. Missing 1099. Got 420 code. Waited for notice. IRS adjusted automatically. Added tax owed plus small penalty. No full audit needed. Just paid what they calculated. Much simpler than amending. System worked as designed. Saved me paperwork. Your mileage may vary.