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From personal experience with a similar situation, don't just call the general IRS number - specifically ask for the Revenue Officer assigned to your case (should be listed on the notice). They have more authority to help than the regular phone representatives. Also, consider applying for an Installment Agreement while you sort this out, even if you plan to dispute the amount. This can prevent immediate levy actions while you gather documentation to prove the correct amount. Form 9465 is what you'd use for that. Being proactive is key - even a small payment shows good faith and may help with penalty abatement later.
Dylan, I'm sorry you're going through this stress! The CP504 is definitely serious, but the good news is that you still have time to resolve this before any actual levy action occurs. Based on your description, it sounds like the IRS is treating you as if you received all $113K in business income for the entire year ($40K + $73K), when you actually only participated for the first quarter and then sold your share. This is a common issue when business partnerships aren't properly documented with the IRS. Here's what I'd recommend as your immediate action plan: 1. **Call the IRS tomorrow** using the number on your CP504 notice and request a temporary hold on collection activities while you gather documentation 2. **Gather key documents**: Your sale agreement from March 2017, bank statements showing the $9K you received, any profit/loss statements from those first 3 months, and documentation of when you stopped being involved in the business 3. **File an amended return (Form 1040X)** for 2017 showing your correct income - likely just the portion you earned in those first few months plus the $9K sale proceeds 4. **Consider getting help** - this involves business income allocation and partnership tax issues that can be tricky to navigate alone The fact that you were only making $3-5K from your job and the business was short-term makes it very unlikely you'd owe $24K. Stay calm, act quickly, and document everything!
As someone who works in corporate finance, PLEASE don't submit fake documentation. We actually do check these things, and people get caught more often than you'd think. I've seen people terminated for expense fraud over amounts as small as $50. Most expense systems now have built-in fraud detection that looks for patterns and irregularities. Using a restaurant's tax ID inappropriately could also potentially trigger an audit flag.
Really? I figured with so many expense reports coming through, most companies wouldn't bother checking each one carefully. Do you have automated systems that flag suspicious activity or do you manually review everything?
We use a combination of both automated systems and manual reviews. Our expense management software automatically flags receipts that have duplicate amounts, suspicious formatting, or tax IDs that don't match the vendor name. We also randomly audit a percentage of all submissions. The automated system is surprisingly good at catching fake receipts - it can detect things like inconsistent fonts, unusual formatting, or receipts that look too "perfect." Plus, if someone uses a real restaurant's tax ID on a fake receipt, that creates a paper trail that can be discovered during tax reconciliation. @cfe58c2efb8d seriously, just talk to your manager about the deadline. Most reasonable managers would rather extend it or find another solution than deal with the HR nightmare of terminating someone for expense fraud.
I completely agree with everyone here - creating fake receipts is absolutely not worth the risk. As someone who's dealt with IRS audits, I can tell you that expense fraud can have consequences far beyond just losing your job. If your company gets audited and fraudulent expenses are discovered, it can trigger additional scrutiny on your personal tax filings too. Instead of risking your career and potentially legal issues, here are some immediate legitimate options: 1. Order groceries online for pickup/delivery before the deadline 2. Buy meal prep ingredients in bulk 3. Purchase from restaurant delivery apps and freeze the food 4. Ask if the budget can be used for team meals or office catering The key is to make actual purchases with real receipts. Even if you end up with more food than you immediately need, it's infinitely better than creating fraudulent documentation. Your company's accounting team will thank you for being honest, and you'll sleep better at night knowing you handled it properly.
Quick question - what exactly counts as "income" for US tax purposes when living abroad? I have a family member who mostly received gifts from local family while living in another country. Would that even count for filing requirements?
Gifts generally aren't considered taxable income to the recipient for US tax purposes, regardless of whether you're in the US or abroad. So if your family member was just receiving financial support from relatives, that likely wouldn't trigger a filing requirement. However, if they had any actual employment, investment income, pensions, etc., those would potentially be reportable.
This is such a helpful thread! I'm dealing with a similar situation with my sister who lived in Australia for 12 years and never filed. Reading about the Streamlined Filing Compliance Procedures gives me hope that there's a reasonable path forward. One thing I'd add for the original poster - when your brother does start working again, make sure he keeps excellent records of his foreign residence period. Having documentation showing he was genuinely living abroad (not just traveling) can be really important for qualifying for programs like the Streamlined procedures or demonstrating that any non-filing was truly non-willful. Also, regarding the health insurance question - I work in benefits administration and can confirm that marketplace enrollment by itself doesn't trigger IRS investigations. The systems are more focused on verifying current eligibility than digging into historical filing patterns.
Friendly reminder to double check that your direct deposit info is correct! I thought mine was stuck but turns out I typed one number wrong in my account # ๐คฆโโ๏ธ
Filed mine on 2/2 and still waiting too! Called last week and they said they're processing returns in the order received but with "additional security measures" this year. The rep couldn't give me a specific timeline but said to check back in 2-3 weeks if still no update. Hang in there! ๐ค
Thanks for sharing that info! "Additional security measures" - that probably explains the delays. At least we know they're working on them in order. Really hoping we both see some movement soon! ๐ค
Mei Chen
Quick question - does anyone know if taking a job that's work-from-home but with a company based more than 50 miles away would qualify for this exclusion? My situation is different from OP's international move, but I'm wondering if the "50 mile" rule would apply even if I'm not physically relocating my home.
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Aisha Mahmood
โขUnfortunately, that wouldn't qualify. The exclusion is based on you actually needing to move your residence due to the job change. The 50-mile test is measuring the distance between your old workplace and your new workplace, not the location of the company's headquarters. If you're working from home and not physically relocating, you wouldn't meet the criteria for a work-related move, even if your employer is located more than 50 miles away.
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Connor Murphy
I'm dealing with a similar situation but with some additional complications. My company is relocating me from Denver to London, and I've lived in my house for only 20 months. Like you, I also have a rental portion - I converted my garage into a studio apartment that I've been renting out for the past year. From what I've researched, your international move definitely qualifies for the partial exclusion. The IRS considers any work-related move where your new job location is at least 50 miles farther from your old home than your previous job location was - and international moves clearly exceed this threshold. One thing I learned that might help you: when calculating the business use portion for the rental, make sure you're using the time period that the space was actually used for business purposes, not just the square footage. Since you mentioned renting the basement for the full 18 months you lived there, that would affect the allocation. Also, keep detailed records of your company's transfer documentation, your employment contract for the Singapore position, and any relocation assistance they're providing. The IRS may want to see evidence that this was truly a work-necessitated move rather than a personal choice to relocate. Have you considered consulting with a tax professional who specializes in international relocations? The interplay between the partial exclusion and international tax implications can get complex, especially if you'll be subject to foreign tax obligations on the sale.
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Keisha Thompson
โขThanks for sharing your experience, Connor! Your point about documenting the time period for business use is really helpful - I hadn't thought about that distinction. Since we've been renting the basement for the full 18 months, that definitely affects how we need to calculate things. The international tax implications are something I'm definitely concerned about. Do you know if there are any special considerations for the timing of the sale relative to when we actually move to Singapore? We're planning to sell before we relocate, but I'm wondering if that affects our qualification for the partial exclusion at all. Also, did you end up finding a tax professional who specializes in international moves? That sounds like it might be worth the investment given the complexity of our situation.
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