Thanks for the clear explanation. My gut was telling me this didn't sound right. I'm definitely going to get a second opinion from a tax professional before filing. Do you think I should tell my immigration lawyer about these concerns or just quietly get tax advice separately?

I would absolutely discuss your concerns with your immigration lawyer, but frame it constructively. Perhaps say something like, "I've been researching the tax implications, and I understand that dependent status vs. marital status on tax returns can be scrutinized during the immigration process. Can we discuss how to properly document our financial relationship without potentially creating inconsistencies?" This approach acknowledges your lawyer's expertise in immigration while opening the door to correcting any tax misunderstandings. Also, it would be very helpful to consult with a tax professional who has experience with immigration cases specifically. They can often provide documentation that satisfies both IRS requirements and supports your immigration case appropriately.

True, and there's also the issue of the stepson's other parent. If the biological parent is claiming the child as a dependent (which they likely have the right to do if providing support), then trying to also claim the child could trigger automatic IRS flags.

Thank you for explaining this! Does this mean we'd only pay the 6% penalty for one year on his excess amount, and then "absorb" it in the following year by under-contributing? That sounds much simpler than trying to do a late removal now.

Exactly right! You would only pay the 6% penalty for one year on the $3,400 excess in his account (about $204). Then in the following year, if his contribution limit is $6,500, he would only contribute $3,100 to his Roth IRA. This effectively uses $3,400 of that year's contribution limit to "absorb" last year's excess. The key thing is that you need to have contribution eligibility in that following year. If your income exceeds the limits again, this approach wouldn't work since you wouldn't be eligible to make any contributions that could "absorb" the previous excess.

There's a specific formula the IRS provides: Earnings = Excess contribution × (Ending balance - Beginning balance) ÷ Beginning balance So if you contributed $6,000 when your limit was $3,000 (so $3,000 excess), and your account went from $20,000 to $22,000 during that period, the earnings on your excess would be: $3,000 × ($22,000 - $20,000) ÷ $20,000 = $3,000 × $2,000 ÷ $20,000 = $300 You'd need to withdraw $3,300 total ($3,000 excess + $300 earnings).

No self-employment at all - just a regular W-2 job. The amendment was only to claim some education expenses I forgot on the original filing (Form 8863 for education credits). Nothing business related whatsoever. I'm wondering if maybe the "8" in 8863 and the "95" from somewhere else got combined into "8895" in their system? Still doesn't really explain why they'd be asking for a form that doesn't exist though.

The combination of 8863 and some other form number accidentally creating 8895 is actually a really plausible explanation. The IRS's computer systems are ancient and glitches like this happen more often than they admit. Since your amendment involved education credits, another possibility is they might be looking for Form 8915 (which relates to retirement plan distributions, but sometimes these codes get mixed up). Or maybe even Form 8885 (Health Coverage Tax Credit). I'd definitely recommend calling back and specifically explaining you amended for education credits using Form 8863, and asking if that might be causing confusion in their system. Sometimes just mentioning the correct form can help the rep figure out what's happening.

Good point! Real IRS notices have specific security features. The paper should have a watermark visible when held up to light. Also check if the letter has your last 4 SSN digits (scammers often don't have this). And NEVER call a phone number listed in a suspicious notice - always call the official IRS number instead.

Thank you for these suggestions! I hadn't heard of Form 911 before, but I'll definitely look into it. I'm going to request my complete account transcripts right away. One question - for the "reasonable cause" explanation, should I focus more on my financial hardship or my lack of understanding about the Form 8949? I want to make the strongest case possible.

Focus on both aspects equally, but make sure to emphasize that your misunderstanding was directly related to a new form requirement that had just been introduced. The IRS tends to be more sympathetic when confusion stems from their procedural changes rather than just general tax ignorance. Also document the financial impact this had on you as a low-income person with a new baby. Include specific details about your income at the time ($16K annual) compared to the assessment ($5,800) to illustrate the disproportionate impact. When filing Form 911, be very clear that this situation created economic hardship for you over multiple years as they recaptured your refunds and tax credits that you needed for basic living expenses.

I'm a tax attorney, and while equitable doctrines do exist, they're extremely difficult to successfully apply against the IRS. The Supreme Court has generally held that filing deadlines in tax statutes are jurisdictional, meaning equitable tolling doesn't usually apply. Your best bet is always to find a technical exception within the code itself rather than relying on equitable arguments.

For the original poster, I would focus on three potential avenues: First, examine if any of the refund offsets occurred within the last two years, which might create a separate claim for refund for those specific payments. Second, determine if the IRS made any computational errors in their original assessment (not just the taxpayer's reporting error), which can sometimes extend the limitations period. Third, pursue penalty and interest abatement aggressively through Form 843, as those have the highest likelihood of success based on the circumstances described. While recovering the original tax assessment from 2012 is unlikely, these other approaches might recover a meaningful portion of what was paid.

Do you include things like gas expenses for going to thrift stores and yard sales on this same statement? Or are those tracked separately?

I track those separately as business expenses rather than including them on the sales summary statement. The summary statement is specifically for showing your inventory's cost basis and sales prices. Transportation costs, supplies, platform fees, and other business expenses should definitely be deducted, but they belong in different sections of your tax return. I keep a separate spreadsheet for those business expenses categorized by type (transportation, office supplies, shipping materials, etc.).

This is terrible advice. The IRS absolutely can and does audit small businesses, especially with the new lower 1099-K thresholds. A summary statement needs to show your basis for claiming costs against specific income. If you get audited with just "total sales" and "total costs" with no breakdown, you're asking for trouble.