Tell your coworker to google "IRS frivolous tax arguments" and look at the official IRS website. They literally have a whole section dedicated to debunking these exact schemes and warning about the $5,000 penalty for submitting these arguments. Also search for "tax protester cases" to see how many people have gone to PRISON for this stuff!

Your instincts are spot on - this is absolutely a scam and your coworker is playing with fire. I work in tax compliance and see the aftermath of these schemes regularly. The "Revocation of Election" is complete nonsense with no legal basis whatsoever. The scary thing is that people can get away with it for a few years, which makes them think they're safe. But the IRS has up to 6 years (or indefinitely in cases of fraud/non-filing) to come after you. When they do, it's devastating - we're talking about accumulated interest, failure-to-file penalties, failure-to-pay penalties, plus that $5,000 frivolous filing penalty for each year. I've seen cases where someone owed $15K in actual taxes but ended up owing over $60K after penalties and interest. Your coworker needs to get back into compliance immediately before this gets worse. The longer he waits, the more expensive this mistake becomes.

As someone who just went through this exact situation last month, I can confirm what everyone is saying - you absolutely need to report ALL dividend income regardless of amount. I had $3.47 in dividends from some leftover stock and initially thought about skipping it, but after doing research (and talking to a tax professional), I learned that the IRS considers any unreported income as potential tax evasion, even tiny amounts. The key thing to remember is that even though your brokerage didn't send you a 1099-DIV, they still reported those payments to the IRS with your SSN. So the IRS knows you received that money, and if you don't report it, their matching systems could flag it later. I ended up calling my brokerage (Schwab) and they were super helpful - didn't need my password, just answered some security questions and they gave me the exact dividend amounts over the phone. Took maybe 10 minutes total. Way easier than trying to reset passwords or worry about whether I was reporting correctly. My advice: just call your brokerage, get the exact amount, and report it. The peace of mind is worth way more than the few cents in additional tax you'll owe!

I'm dealing with a similar situation right now and this thread has been incredibly helpful! I have about $8 in dividends from a Robinhood account that I can't access (phone got stolen and lost my 2FA). After reading everyone's experiences, I'm definitely going to report it rather than risk any issues. The explanation about the $10 threshold being for when companies MUST send forms vs. when WE must report income really cleared up my confusion. I'm going to try calling Robinhood tomorrow to see if they can help me get the exact amount without logging in, like others mentioned worked with their brokerages. If that doesn't work, I'll probably go with one of the AI tax services mentioned here to make sure I'm handling this correctly. Thanks to everyone for sharing their experiences - it's really reassuring to know I'm not the only one dealing with this kind of situation during tax season!

This thread has been absolutely incredible to read through! As someone who's been working as an EA for about 3 years now, I wish I'd had access to this kind of comprehensive discussion when I was starting out and feeling uncertain about advertising my credentials. What I find most valuable here is how everyone approached the question from different angles and consistently arrived at the same conclusion - EAs can absolutely advertise their credentials, but precision in language is crucial. The distinction between saying "licensed by the IRS" (incorrect) versus "authorized by the U.S. Department of Treasury to practice before the IRS" (correct) is so important for compliance. I've been using "Enrolled Agent, federally authorized to represent taxpayers before the IRS" in my marketing materials, and seeing all the similar language examples here gives me confidence I'm on the right track. The fact that people verified this through multiple authoritative sources - from AI analysis of Circular 230 to direct calls with the Office of Professional Responsibility - really reinforces the reliability of this guidance. @NebulaKnight - looks like you'll need to concede this debate to your colleague, though the nuanced language requirements everyone discussed will definitely help both of you market your services more effectively and compliantly!

This has been such an educational thread to follow! As someone who just passed the EA exam last month and is starting to think about how to market my new credential, this discussion couldn't have come at a better time. What really stands out to me is how this demonstrates the importance of seeking multiple authoritative sources rather than relying on hearsay or assumptions. The fact that people used everything from AI analysis of Circular 230 to direct calls with the IRS Office of Professional Responsibility, and all arrived at the same conclusion, gives me real confidence in the guidance. The key takeaway seems crystal clear: EAs absolutely CAN and SHOULD advertise their credentials - we've earned this federal authorization and taxpayers need to know about our qualifications. The critical element is using precise language that accurately represents what the credential means and who grants it. I'm taking notes on all the compliant phrasing examples shared here. "Enrolled Agent authorized by the U.S. Department of Treasury to practice before the IRS" appears to be the most precise and widely accepted language. It's such a relief to have this clarity as I start building my marketing materials. Thanks to everyone who took the time to research and share their experiences. This kind of collaborative knowledge-sharing is exactly what makes the EA community so valuable for practitioners at all stages of their careers!

I've been reading through all these responses and they've been incredibly helpful! I'm in a very similar situation - owing around $3,100 for the past two years and getting increasingly anxious about whether the IRS might send a lock-in letter to my employer. What really struck me from this discussion is how the percentage-based analysis makes so much more sense than just looking at dollar amounts. At my income level of around $78k, I'm underwithholding by about 4%, which based on the insights from tax professionals here, seems to put me in the "monitoring" rather than "enforcement action" category. The consistent theme throughout all these responses about being proactive rather than waiting has really convinced me to take action. It's clear that the IRS prefers voluntary compliance and that fixing the issue now can prevent any escalation to enforcement measures. I'm planning to use the IRS Tax Withholding Estimator this weekend and submit an updated W-4 first thing Monday morning. Reading about everyone's positive experiences after taking proactive steps has given me so much confidence that this is the right approach. The anxiety of wondering "what if" is definitely worse than just addressing the issue head-on. Thanks to everyone who shared their real-world experiences and professional knowledge - this discussion has been more valuable than any official IRS publication I've tried to decipher!

I work in payroll administration and have processed several lock-in letters over the years, so I wanted to share some practical insights from the employer side of this process. The lock-in letters we receive are quite specific - they tell us exactly what withholding rate to use and don't give us any discretion. What's interesting is that we typically receive these for employees who have been consistently underwithholding by significant amounts (usually $5,000+ annually) for at least 2-3 years. I've noticed the IRS tends to focus on cases where the underwithholding represents more than 8-10% of the employee's total tax liability. Before the lock-in letter arrives, we sometimes get calls from employees asking about adjusting their W-4 because they received warning notices from the IRS. In every case where an employee proactively fixed their withholding after getting a warning notice, we never received a subsequent lock-in letter for that person. From an employer perspective, these letters aren't embarrassing situations - we process them routinely and confidentially. However, they do override any W-4 the employee submits, so the employee loses control over their withholding until the IRS releases the lock-in (which can take years). My strong recommendation is to use the IRS withholding calculator now and adjust your W-4 before this escalates. At $3,500 owed for two years, you're likely still in the warning phase rather than enforcement, but taking action now will keep you out of the lock-in system entirely.

As someone who went through this exact scenario last year, I'd strongly recommend filing amended returns rather than waiting it out. I had about $4,800 in unreported dividends from 2021 that I completely forgot about, and I was in a similar income bracket to you. The IRS definitely does automated matching on dividend income - it's one of the most reliable income sources they cross-check because the 1099-DIV forms are filed electronically by brokerages. The fact that you haven't received a notice yet doesn't mean much; I've seen people get CP2000 notices 18+ months after filing. I ended up filing a 1040-X after consulting with a tax professional, and it was honestly the best decision. The additional tax was around $1,500 plus about $200 in interest, but no penalties since I voluntarily corrected it. If I had waited for them to catch it, I would have faced the 20% accuracy penalty on top of everything else. The peace of mind alone was worth it - no more wondering when that notice might show up in the mail. Plus, showing good faith by correcting your own mistake generally keeps you off their radar for future scrutiny.

I've been following this thread and wanted to add my perspective as someone who works in tax compliance. The automated matching system for dividend income is extremely reliable - the IRS receives 1099-DIV forms electronically from brokerages and their computers flag virtually every discrepancy, regardless of amount. Based on your income level ($190k), you're likely in the 32% marginal tax bracket, so the additional tax on $6,500 of dividends would be roughly $2,080 per year. Add the 20% accuracy penalty (about $416 per year) plus interest accruing from the original due dates, and you're looking at a significant amount that keeps growing. The timing of notices can be unpredictable due to IRS processing backlogs, but the three-year statute of limitations for assessment means they have until April 2026 and April 2027 to pursue those tax years. Given their improved systems and funding, waiting it out is increasingly risky. I'd strongly recommend filing amended returns (1040-X) for both years. You'll likely avoid the accuracy penalties, control the timing, and demonstrate good faith compliance. The interest will be much less than if you wait for notices, and you'll have peace of mind knowing the issue is resolved on your terms.