I've seen dozens of cases like this at the VITA site where I volunteer. The verification letter system has a serious flaw - the IRS computer system marks letters as "sent" when they're queued for printing, not when they actually go out. During busy periods (especially February-April), there can be a 2-3 week gap between when the system says a letter was sent and when it actually gets printed and mailed. To make matters worse, these verification letters are often generated by automated systems that don't check if previous letters were delivered. So when you call, the representative sees the letter marked as "sent" in their system, assumes you should have received it, and triggers a new one - which enters the same backlogged printing queue. We've had taxpayers receive 4-5 identical verification letters all at once in May for returns filed in February. The system is fundamentally broken.

This is incredibly frustrating but unfortunately very common right now. I went through the exact same cycle - called three times, each time told to wait 14 more days, never received a single letter despite them claiming multiple were "sent." What finally worked for me was booking an appointment at my local Taxpayer Assistance Center through the IRS website. I was able to get an appointment within 10 days, brought two forms of ID, and they verified my identity on the spot. My refund was processed and deposited within a week after that. The phone verification system seems completely broken this year. Don't waste more time calling - go straight to the in-person appointment option. It's the only reliable way I've seen people actually resolve this verification nightmare.

I've been following this thread closely since I'm in a similar situation with a Roth CD at a local bank. Based on all the advice here, I called my target brokerage (Schwab) today and specifically asked for their "IRA Transfer Department" as Gianna suggested. The specialist I spoke with was incredibly knowledgeable and confirmed they handle CD liquidations as part of direct transfers all the time. She explained that they send a letter to my bank requesting liquidation and transfer of the proceeds, and the bank handles the CD closure on their end. The funds never pass through my personal accounts, so there's no 60-day clock or rollover limit concerns. She also mentioned something important that I haven't seen discussed here - make sure your CD is titled correctly as an IRA. If it's just a regular CD that you've been treating as retirement savings, the transfer process is different. But if it's properly titled as "John Doe IRA" or similar, then the direct transfer should be straightforward. The whole process is expected to take 2-3 weeks once they receive my completed paperwork. Much less stressful than the rollover route my bank initially suggested! Thanks everyone for sharing your experiences.

As someone who works with IRA transfers regularly, I want to emphasize a few critical points that could save you from potential issues: **First, verify your CD is actually an IRA.** Some people have regular CDs they contribute to thinking they're retirement accounts, but they're not IRA-titled. Check your statements - it should clearly say "IRA" in the account name. **Second, regarding the direct transfer vs. rollover debate:** The direct trustee-to-trustee transfer is absolutely the safer route. When you do a 60-day rollover with a Roth IRA, while it's generally non-taxable, there's still the risk of missing the deadline and having it treated as a distribution. Plus, if you've done any IRA rollovers in the past 12 months, you could be violating the one-per-year rule. **Third, get everything in writing.** Whether you go with the direct transfer or the rollover route, make sure both institutions provide written documentation of how they're coding the transaction. This is crucial for your tax records. The advice about calling Fidelity's IRA transfer department is spot-on. They deal with CD liquidations constantly and have standardized procedures. Don't let your current bank convince you that cashing out to your personal account is the only option - that's often just the easiest path for them, not necessarily the best for you. One final note: if your CD has significant early withdrawal penalties, factor those into your decision about timing. Sometimes it's worth waiting until maturity if the penalties are steep.

WARNING: One thing nobody has mentioned yet is that even if Form 8300 doesn't apply, banks are still required to file Suspicious Activity Reports if they think you're depositing cash in a way that seems designed to avoid reporting requirements. If you deposit $9,999 in cash, that looks very suspicious. Even making regular cash deposits that seem timed specifically to stay under $10k could potentially raise flags. I'd recommend being very transparent with your bank about the source of your cash income. Maybe even talk to a bank manager to explain your business so they understand why you're making regular cash deposits.

I've been dealing with a very similar situation as a freelance graphic designer who receives cash payments from multiple small business clients. After going through this exact confusion last year, I can confirm what others have said - Form 8300 definitely doesn't apply to your situation. The key thing that helped me understand this was realizing that Form 8300 is really about tracking single large cash transactions that could indicate money laundering or other suspicious activity. When you're receiving legitimate business income in smaller amounts from many different clients, that's exactly the opposite of what they're looking for. What I found most helpful was setting up a simple business checking account specifically for my freelance income. This made my monthly cash deposits look much more legitimate to the bank, and it also simplified my record-keeping for taxes. I bring a deposit slip with me that lists each client payment separately, so there's a clear paper trail. Your spreadsheet system sounds perfect - that's exactly the kind of documentation the IRS wants to see. Keep tracking those client payments individually, continue with your quarterly estimated taxes, and you should be all set. The fact that you're being so organized about this shows you're handling everything correctly!

For what it's worth, the software I use (TurboTax) asks for 9 digits but lets me proceed with just 5. Most tax software is designed this way - they ask for complete info but don't actually block you from continuing with just the standard ZIP. Just try clicking "continue" or whatever and see if it lets you move forward.

Don't stress about this at all! I went through the exact same panic when I first started filing my own taxes. The 5-digit zipcode is absolutely fine - I've been using just the regular zipcode for years without any issues. Most tax software asks for the full 9 digits because they're trying to be thorough, but the IRS processes millions of returns with just 5-digit zipcodes every year. Your return won't be rejected, delayed, or flagged for audit because of this. If your software absolutely requires 9 digits (which is rare), you can safely put 0000 for the last four digits, or look up your actual +4 on the USPS website if you want to be extra careful. But honestly, you're overthinking this - it's one of those details that feels scary when you're doing taxes for the first time but is actually no big deal at all. You've got this! The fact that you're being careful and asking questions shows you're already on the right track.

As a newcomer to this community, I'm incredibly grateful for this detailed discussion! I've been struggling with these exact M-1 adjustment issues for prepaid expenses and this thread has been more helpful than any textbook or training I've encountered. The consensus approach of maintaining a separate tracking schedule that shows book basis vs. tax basis makes so much sense. I especially appreciate @Ryder Greene's breakdown of the Big 4 methodology and @Hugo Kass's audit documentation tips. I'm currently working on a corporate return where the client has prepaid software licenses spanning 3 years, and I was getting completely lost trying to figure out the proper M-1 treatment. Based on this discussion, I'm going to: 1. Create a dedicated workpaper tracking the excluded amount under the 12-month rule 2. Set up annual amortization of that exclusion over the benefit period 3. Calculate each year's M-1 adjustment as the change in the tax-book difference 4. Document my methodology thoroughly for future reference One quick question - for software licenses that auto-renew annually but are paid upfront for multiple years, do you treat each annual license period separately for the 12-month rule analysis, or as one continuous multi-year agreement? I want to make sure I'm applying the rule correctly to this specific situation. Thanks again to everyone who contributed - this community is an amazing resource!

This has been an absolutely fantastic discussion! As someone who's been lurking in this community for a while, I finally had to jump in because this thread perfectly addresses an issue I've been wrestling with. I'm working with a client who has multiple prepaid expenses with varying terms, and I was making the classic mistake of trying to calculate M-1 adjustments on the fly each year rather than setting up proper tracking from the beginning. The systematic approach outlined here - especially the separate schedule tracking book vs. tax basis - is exactly what I needed. What really helped me understand the concept was realizing that the M-1 adjustment isn't about the prepaid expense itself, but about the *change* in the book-tax difference from year to year. Once that clicked, the whole calculation made sense. I'm going to implement the tracking methodology described by @Ryder Greene and make sure to document everything thoroughly as @Hugo Kass recommended. For anyone else struggling with this topic, I'd suggest reading through this entire thread - it's like getting a masterclass in prepaid expense M-1 adjustments from experienced practitioners. Thanks to everyone who shared their knowledge here. This is why I love this community - practical, real-world guidance from professionals who've actually dealt with these issues in practice!