Thanks for this info! Do you know if there's a specific form I should use for the abatement request? I've seen some mentions of Form 843 but I'm not sure if that's the right one for partnership penalties.

Yes, Form 843 "Claim for Refund and Request for Abatement" is the correct form for requesting abatement of partnership penalties. Be sure to fill out sections 1, 2, 3a, and 5 completely. In section 5, you'll want to clearly explain your reasonable cause or first-time abatement qualification. Attach any supporting documentation that backs up your explanation. This might include communications with your tax preparer showing they led you to believe they had filed an extension, or any other evidence that shows you acted in good faith. Send it certified mail so you have proof of submission.

Yes! We had a $3,600 partnership penalty reduced to $1,200. Our situation was that we had filed 3 months late because our accountant had health issues. The IRS didn't fully accept our reasonable cause argument but did reduce it by 2/3. Make sure to ask specifically about partial abatement if they push back on a full waiver.

What's a reasonable fee range to expect for resolving something like this if it's just a straightforward error? I've heard horror stories about firms charging thousands upfront.

For a straightforward error resolution where the facts clearly support your position, expect to pay between $1,500-3,000 total for a CPA or tax resolution specialist. This would typically include analyzing the notice, preparing a response with supporting documentation, and following up with the IRS. More complex situations requiring multiple rounds of correspondence, appeals, or settlement negotiations would naturally cost more. The key is finding someone who will clearly outline their fee structure upfront - whether hourly, flat fee, or a combination. Any firm requiring $5,000+ upfront for what appears to be a calculation error dispute is charging premium prices that aren't justified for standard resolution work.

I tried the Taxpayer Advocate route last year. They're helpful but extremely overwhelmed. Took 4 months just to get assigned an advocate, then another 2 months before they could take any action. If you've got time and your issue isn't urgent, they're great. If you need quick resolution or have collection actions pending, you might need additional help.

I switched from TurboTax to TaxAct last year and regretted it. The interface is clunky and it actually missed some deductions related to my trading. I ended up going back to TurboTax and finding the stuff it missed. Neither is great for serious traders tbh.

Thanks for the tip about making copies! Do you know if there's any specific form I need to track the carryforward amounts if I can't use the full credit in the amended return year?

There's no specific IRS form for tracking the carryforward amounts, but you absolutely need to keep careful records yourself. I created a simple spreadsheet showing the total credit amount, how much I used each year, and how much was carrying forward. When you file the next year's taxes, you'll need to enter the carryforward amount from the previous year on Form 8839. The tax software should prompt you for this, but many people miss it if they switch tax preparers or software between years. This is why your own tracking is crucial. Also keep all your amended return paperwork together with your adoption documents for at least 7 years in case of an audit.

I used TurboTax to amend my 2020 return for adoption credits and it worked fine. Just make sure you have Form 8839 filled out correctly with the adoption info. The wizard will ask about qualified adoption expenses - if your child is "special needs" for tax purposes, you enter $0 for expenses but still claim the full credit amount.

Oh wow, I hadn't even thought about the currency conversion documentation! Most of my payments have been through PayPal - do you know if their conversion rates are acceptable for IRS purposes? Or should I be using some official government conversion rate?

PayPal conversion rates should be fine as long as you have the documentation showing the actual USD amount that was charged to your account. The key is having records showing the exact USD amount paid on specific dates. If PayPal doesn't clearly show this (sometimes their reporting can be confusing), you can use the Treasury Department's official exchange rates or another reputable source like OANDA or XE. Just be consistent with whichever source you choose and keep documentation of the rates you used along with the dates of payment.

Dangerous advice! The W-8BEN requirement isn't just about withholding - it's about properly documenting the status of who you're paying. Without it, you technically can't verify they're foreign persons exempt from US reporting requirements. Your accountant is taking a risk that might have worked out so far, but the IRS is increasing scrutiny of international payments. Just because you haven't been audited doesn't mean the approach is compliant.