How can you tell if a CP2000 is legit? I got one recently but now I'm worried it might be fake. Are there specific things to look for?

A legitimate CP2000 will always come by U.S. mail (never email), include your tax ID number, the tax year in question, and a detailed explanation of the proposed changes. It will have specific contact information for the IRS, including a toll-free number. The notice will also include your rights as a taxpayer and explain the appeals process. Fake notices often have spelling/grammar errors, demand immediate payment (especially via gift cards, wire transfers, or cryptocurrency), don't provide clear explanation of the discrepancies, or direct you to unofficial websites. You can always verify a notice by calling the IRS directly at 800-829-1040 (not using any number on the suspicious notice itself).

Does asking for an extension stop the interest from continuing to accrue though? I'm worried about making the amount owed even higher by delaying.

We haven't received any official letters from the IRS about this yet. Our accountant just called saying his contact at the IRS mentioned there's some kind of "hold" on our claim during a call about something totally unrelated. Super frustrating to get such vague information! We're filing Form 843 to try to get some interest on the delayed amount, but not sure if that will just complicate things further.

That's pretty typical unfortunately. The IRS is seriously understaffed for handling ERC claims, especially the larger ones that get flagged for review. I wouldn't recommend filing Form 843 while your claim is still pending - that could actually create a duplicate file in their system and potentially cause more delays. What worked for us was having our accountant file Form 911 (Taxpayer Advocate Service request) after the 9-month mark, which at least got us assigned to someone who could provide updates.

This is super important! My accounting firm has seen a huge difference in processing times between clients who received earlier ERC payments versus those filing for the first time in 2022-2023. First-time claims over $200k are getting flagged for manual review almost automatically now.

Does this mean I should be using Schedule D instead of Schedule C for reporting ticket resales? I'm so confused now...

For occasional, non-business ticket reselling, Schedule D (Capital Gains and Losses) is typically appropriate since you're selling a capital asset. You'd report the sale price as proceeds, the original ticket cost as your basis, and the difference as your gain. If you're regularly buying and reselling tickets as a business activity, then Schedule C would be more appropriate. The IRS looks at factors like frequency of sales, intent when purchasing, and whether you're running it like a business to determine which is correct. When in doubt, consult with a tax professional who can look at your specific situation.

This is an interesting approach, but risky. The IRS would likely question why the "gifts" were sold so quickly, which makes the gift argument look like tax avoidance. Plus, the 1099-K will still be issued in OP's name since they handled the transaction. I wouldn't recommend this route without proper documentation from the very beginning.

That makes sense. I was thinking there might be a workaround, but you're right - it would look suspicious if the "gifts" were immediately sold. Probably best to just report all the income and deduct the costs as others have suggested. Better to pay the proper taxes than risk an audit!

Thanks for bringing that up. How exactly do you document 100% business usage? I literally only use this laptop for my business operations and have a separate personal tablet for everything else, but I'm not sure how I would prove that if asked.

The best way to document 100% business usage is to maintain a log showing regular business activities performed on the laptop. This doesn't need to be extremely detailed - just notes about what business tasks you use it for, which business software is installed, and perhaps noting that you have separate personal devices. It also helps to have the laptop purchased under your business name if possible and to keep it physically at your business location if you have one separate from home. If audited, the IRS is mainly looking for reasonable evidence that you're not claiming personal expenses as business, so even having clear separation of devices (business laptop vs. personal tablet as you mentioned) is good supporting evidence.

For partial business use like your 50/50 iPhone situation, you need to split everything proportionally. Since the phone is 50% business use, you'd depreciate 50% of the $1,100 cost (so $550) on your business taxes. For the trade-in, you'd calculate if there's any gain or loss on the business portion of your old phone (likely none if it's a typical depreciated phone).

That's really good to know! Do you have any recommendations for keeping track of all these potential deductions throughout the year? I feel like I might be missing stuff.

I just use a simple spreadsheet with categories for each potential deduction - mortgage interest, property tax, charitable donations, medical expenses, etc. I update it monthly so I don't forget anything. Some tax software also has year-round tracking features or apps. The key is being consistent about saving receipts and documentation. I take photos of donation receipts immediately and save them to a specific folder. For medical expenses, I request year-end summaries from all my providers. It's also smart to check your itemized deductions against the standard deduction amount mid-year to see if you're on track to benefit from itemizing.

Not all points are deductible though. I learned this the hard way. Points for lowering your interest rate are deductible, but points that are really just fees disguised as points aren't. Check IRS Publication 936 for the full details.