For point #1, doesn't the recipient keep your basis though? So they might get hit with bigger capital gains tax when they sell? I thought that was one reason people wait to transfer at death - the step-up in basis.

You're absolutely right about the basis issue. When you gift assets during your lifetime, the recipient keeps your original basis (with some adjustments for gifts that have decreased in value). In contrast, assets transferred at death get a "step-up" in basis to fair market value, which can eliminate capital gains tax on all the appreciation that occurred during your lifetime. This is a critical consideration when deciding between lifetime gifts versus transfers at death. The best strategy often involves a mix - gifting some assets (especially those with minimal appreciation or those expected to grow significantly in the future) while holding other highly-appreciated assets until death to get the basis step-up. This gets pretty complex and is definitely one reason why people use estate planning professionals instead of just making outright gifts.

This is so true. My sister's ex-husband would have gotten half of her inheritance if my parents hadn't used a trust. The trust protected it as separate property that wasn't divided in the divorce.

There's also special needs trusts for disabled family members. Direct gifts could disqualify them from government benefits but a properly structured trust won't.

Thanks for sharing your experience! Did you have any issues with your tax filing that year? Did you need to do anything special on your return to address this duplicate 1099?

I didn't have any issues with my filing because I caught it before I submitted my return. My accountant issued a corrected 1099-NEC showing zero payment once we figured out the mistake. If you've already filed or can't get a corrected form, you should include a written explanation with your tax return specifically addressing this error. The IRS actually has a form for this - Form 8275 "Disclosure Statement" where you can explain discrepancies. Better to be proactive than wait for them to question it.

This is good advice. I work in payroll and we saw several instances of system errors causing duplicate TINs on tax forms during the pandemic benefit period. The software sometimes couldn't properly categorize certain types of payments.

What kind of documentation would be considered solid proof for 100% business use? I have a personal vehicle too, so these test cars really are just for product development and demos.

For 100% business use, you'll want a detailed mileage log showing every trip was business-related. This should include dates, starting/ending locations, purpose of trips, and odometer readings. Having a separate personal vehicle helps your case significantly. Keep all maintenance receipts with notes about how they relate to business use. Take photos of the vehicles showing any business branding or modifications specific to your product testing. Also maintain a written business policy stating these vehicles are designated solely for product testing and not authorized for personal use.

Even if the vehicles are fully depreciated, you can still deduct maintenance expenses based on business use percentage. Depreciation is separate from ongoing operating expenses. I have a 12-year-old truck that's fully depreciated but still deduct all the maintenance costs for the business portion of its use.

Thanks for bringing this up - it's possible I didn't actually pay after responding. I sent back the response form agreeing to the amount, but now that I think about it, I don't remember if I included a check or if I was supposed to wait for a payment instruction. That could definitely be the issue. Has anyone here paid after responding to a CP2000? Did you include payment with your response or wait for them to send payment instructions?

You generally have two options: you can include payment with your CP2000 response, or you can wait for the IRS to send you a bill after processing your response. If you chose the second option and they haven't processed your response yet, that's likely why you received the CP3219A. I'd recommend calling the IRS (using one of the methods others suggested to get through) and ask about the status of your case. Tell them you agreed to the CP2000 and want to pay the amount due immediately. They should be able to take your payment over the phone or give you instructions for paying online. Make sure to get a confirmation number for any payment you make.

This happened to me too. My company's stock admin platform reported the sales to my brokerage but the cost basis information didn't transfer correctly. The IRS only saw the proceeds and thought I made way more profit than I actually did. What a mess.

Does the IRS send any notification if there's an SSN mismatch or do they just silently delay your refund? I'm paranoid I made a typo now.

They typically don't notify you immediately about the SSN mismatch. What usually happens is your return gets flagged for manual review, and your refund gets put on hold without any specific explanation. Sometimes you'll eventually get a letter in the mail explaining the issue, but that might come weeks after you file. The Where's My Refund tool will just show "still processing" with no details about why. That's why it's so important to triple-check those numbers before filing.

That's actually not a good strategy. Amended returns take MUCH longer to process - we're talking 16-20 weeks minimum instead of the 3-4 weeks for a delayed CTC refund. Plus, you'd have to pay to file twice. Just wait the extra couple weeks.

Thanks for saving me from a bigger headache! I'll just be patient and file everything correctly the first time. Good to know amendments take that much longer - definitely not worth it just to get part of my refund a little sooner.