As someone who's dealt with preparer liability issues firsthand, I'd add a few practical tips: 1) Always keep copies of EVERYTHING you give your preparer - scan or photo every document before handing it over. This protects you if they claim you didn't provide something. 2) Ask upfront about their amendment policy. Some preparers will file amendments for free if they made the error, others charge full price even for their mistakes. 3) Consider getting a second opinion for complex situations. I had another CPA review my return one year and they caught a $1,800 error my regular preparer missed. 4) Document all communications. If they tell you something verbally about deductions or strategies, follow up with an email confirming what was discussed. The reality is that even with insurance and liability protections, fighting with a preparer over mistakes is a huge hassle. Prevention through good documentation and clear communication is way better than trying to recover costs after the fact.

Great question about tax preparer liability! One thing I learned the hard way is to always ask your preparer about their specific policies upfront. When I switched CPAs last year, I made sure to ask: - Do they carry E&O insurance and what's the coverage amount? - What's their policy on fixing their own mistakes at no charge? - How do they handle missed deadlines or filing errors? - What documentation do they keep of our meetings and the info I provide? My current CPA actually gives me a checklist at the beginning of tax season showing exactly what documents I need to provide and when. She also sends me a summary email after each meeting confirming what we discussed. This kind of documentation has saved me twice when there were questions about deductions later. Also worth noting - if you're really concerned about liability, you might want to consider working with a firm rather than a solo practitioner. Larger firms often have more robust insurance coverage and internal quality control processes. They're usually more expensive, but the extra protection might be worth it for complex situations like yours.

One thing to consider - if your partnership has unamortized organizational costs or start-up expenses that haven't been fully deducted yet, the final year is when you get to write off any remaining amounts. Make sure you don't miss this deduction on your final return! Also, don't forget to file Form 8308 if you had any sales or exchanges of partnership interests during the final year leading up to dissolution. That's another form that's easily overlooked in the dissolution process.

Great discussion everyone! I wanted to add a few practical tips from my experience handling partnership dissolutions: 1. **Documentation is key** - Keep detailed records of all final distributions and asset transfers. The IRS may ask for supporting documentation even years later. 2. **Partner capital account reconciliation** - Make sure each partner's Schedule K-1 capital account analysis (Part III) properly shows how their account went from the beginning balance to zero through final distributions and allocations. 3. **State filing considerations** - Don't forget that most states also require a final partnership return, and some have different requirements than the federal return for what constitutes a "final" filing. 4. **EIN closure** - After filing your final 1065, remember to officially close the partnership's EIN with the IRS by sending a letter stating the partnership has been dissolved and the final return filed. The zero balance requirement on Schedule L for final returns is definitely correct - it's one of those things that seems counterintuitive but makes perfect sense when you think about what "final" actually means from a tax perspective.

This is really helpful information! I'm dealing with a similar situation - we filed our 1120 and Form 5472 about 6 weeks late due to a change in accounting firms, and just received our penalty notice for $20,000. Based on what everyone's shared here, it sounds like I have a decent shot at First Time Abatement since we've been filing on time for the past 4 years. I'm going to try the formal letter approach first, making sure to include our compliance history documentation and reference the IRM section that Brianna mentioned. One quick question - for those who were successful with FTA, did you wait for the penalty to be formally assessed before requesting abatement, or did you submit the request as soon as you received the penalty notice? I'm wondering if timing affects the success rate at all.

I went through this exact situation last year and successfully got our Form 5472 penalties completely abated using First Time Abatement. Here's what worked for us: 1. **Act quickly** - Don't wait. The penalties continue to accrue monthly, so file your late returns immediately if you haven't already. 2. **Document everything** - Gather proof of your clean 3-year compliance history. We included copies of our previous years' filing confirmations and IRS transcripts showing timely filings. 3. **Write a detailed letter** - Reference IRM 20.1.1.3.3.2.1 specifically. Explain the circumstances that led to the late filing, emphasize it's your first offense, and detail the steps you've taken to prevent future occurrences. 4. **Be persistent** - Our first request was denied with a generic response. We appealed with additional documentation and got full abatement on the second try. The key thing to understand is that Form 5472 penalties are harsh but FTA still applies if you meet the criteria. With 6 years of clean history, you're in a strong position. Don't let your accounting firm's hesitation discourage you - many CPAs aren't familiar with how FTA applies to international reporting penalties. Total time from first request to full abatement was about 12 weeks. The $25,000 we saved was definitely worth the effort!

I'm dealing with this exact same situation and it's such a relief to find this thread! Mailed my paper return on March 15th and it's been stuck in USPS "In Transit" status for about a week now. I'm expecting a $1,900 refund and the IRS "Where's My Refund" tool shows absolutely nothing. Reading through everyone's experiences here has been incredibly helpful and reassuring. I had no idea this was such a common problem during filing season! The 6-week rule that @Dylan Mitchell mentioned seems to be the standard advice, and @Louisa Ramirez's explanation about processing backlogs really puts things in perspective. I was starting to panic thinking my return was lost forever. I'm going to follow the advice here about contacting USPS first for documentation and waiting the full 6 weeks before taking any drastic action. The Claimyr testimonials throughout this thread are really impressive - especially @Connor O'Reilly's complete change from skeptic to believer after actually using the service. I've already wasted several hours trying to get through to the IRS with zero success. This is definitely teaching me to switch to e-filing next year! The uncertainty and stress of paper filing just isn't worth it when there are faster, more reliable options available. Thanks to everyone for sharing your real experiences - finding this community has been such a lifesaver knowing I'm not alone in this mess and that there are actual solutions that work!

I'm going through this exact nightmare too! Filed my paper return on March 1st and USPS tracking has been stuck on "In Transit" for almost 3 weeks now. I'm expecting a $2,400 refund and the "Where's My Refund" tool shows absolutely nothing. This thread has been incredibly helpful - I had no idea this was such a common issue during filing season! Reading @Dylan Mitchell's advice about the 6-week rule and @Louisa Ramirez's explanation about processing backlogs has really calmed my nerves. I was convinced my return was lost forever. I'm definitely going to contact USPS today to get official documentation about the tracking status, and I'm bookmarking Claimyr for when I hit that 6-week mark. The success stories here are really convincing - especially @Connor O'Reilly's complete turnaround from skeptic to believer after actually trying it. I've already wasted probably 8+ hours this week trying to get through to the IRS phone lines with zero luck. Like everyone else here, this is absolutely my last time filing on paper! Next year I'm e-filing for sure. The stress and uncertainty just isn't worth it. Thanks to everyone for sharing your real experiences - it's such a relief to know I'm not alone in this mess and that there are proven solutions that actually work!

This is a great question that a lot of freelancers wonder about! The bottom line is that cashing checks at the issuing bank versus depositing them in your own account makes absolutely no difference for tax purposes. The IRS tracks income based on who paid you and why, not how you converted the check to cash. Here's what actually matters: if you're doing legitimate freelance work and getting paid over $600 from any single client during the year, they're required to send you a 1099-NEC and report that payment to the IRS. Even if no 1099 is issued (for payments under $600), you're still legally required to report ALL income on your tax return. The good news is that as a freelancer, you can deduct legitimate business expenses like equipment, supplies, home office space, etc. to reduce your taxable income. I'd recommend setting aside 25-30% of each payment for taxes and keeping detailed records of your income and expenses. Don't risk tax evasion charges by trying to hide income - it's just not worth it when there are legal ways to minimize your tax burden through proper deductions and planning.

Great question Emma! I'm also relatively new to freelance work and had similar confusion about this. From what I've learned through research and talking to other freelancers, the method of cashing checks definitely doesn't change your tax obligations. What helped me understand this better is thinking about it from the payer's perspective - if a business pays you $1000 for freelance work, they're going to report that as a business expense regardless of whether you deposit the check, cash it at their bank, or frame it and hang it on your wall. The IRS can match their reported expenses against your reported income. I'd echo what others have said about setting aside money for taxes. I use a simple system where I immediately transfer 30% of any freelance payment to a separate "tax savings" account. It's painful at first, but it saves you from scrambling come tax time. Also, definitely keep track of all your business expenses! Things like your laptop, software subscriptions, even a portion of your home internet can often be deducted. Just make sure everything you deduct is legitimate and well-documented. Better to be conservative and sleep well at night than to get aggressive and worry about audits.