I am trying to file my return using Turbo Tax, and keep getting a rejected edit from the IRS. The edit is associated with Form 8960 (which relates to calculating additional taxes associated with "passive" activities reflected on Schedule E). In 2022, the IRS changed line 4(a) of Form 8960 to include both active and passive income (which "pulls in" the addition of income reflected on Schedule C, which is not a passive activity); but they compensated by subtracting out the "actively participating" income (from Schedule C) as a negative number on line 4(b). THIS is where the IRS edit is having trouble. The error message states that if there is a "non-zero" value, then the number must match what is reported on Schedule 1 of Form 1040 (which does not include income reflected on Schedule C). It further goes on to allow instances where the numbers may differ; but, two of the "mandatory" requirements contradict each other. I talked with the IRS for over 2 hours this morning and all they could say was to "file by paper" or "override my software" (which TurboTax will not allow electronic filing if a form has been overridden. If I "file by paper", the return will go into "No-Man's Lan" and join the other filers who have been waiting for over a year on their 2021 returns.
I mentioned this, because it will affect anyone who is trying to file a return that includes a Schedule C.
