<Note - I hadn't scrolled all the way through comments when I posted this so I hadn't seen that others followed the path>
For curious minds:
Let me add a little context here. Em53's comment about a it being on the IRS side AND the February 5th date are correct. I had my doubts at first but I confirmed the most critical aspect of her response. To ease some of the concerns I have seen posted here, let me fill you in with the following.
- Look at Em53's link in her post. It takes you to the IRS's know issue page. What might have helped clarify things is that there is an extra step. Click on the one and only line for 2022 issues. You will download a spreadsheet. At least at the time of writing this, page down to line 74. Cell B74 should have Form 8960. If you know how to use filters, you can filter column B using the text 8960. The error is listed as Em53 stated it was along with the February 5 Projected Resolution Date.
- Calling into the IRS will not help. The people offering assistance are doing so based on the tax code and forms. This issue is an electronic filing business logic error so as far as they are consider, the forms are right. If you were manually doing your return, this problem would not exist.
- Think like a computer for a second. Turbo Tax and other provides have the software to correctly prepare your return. I though for sure this was a programing error on their end, but it is no. When the return is file, data is mapped for the IRS. Companies send those files and the IRS has logic to take data point A and put it in the field 00001 on their side. When the IRS checks your return data, they have an error in the business logic that rejects the return because they are missing another piece of data that they have, but didn't consider.
- If you are hanging in there, money earned from a sole proprietor or partnership, has to be defined as either active or passive. Remember where you check the box about "Materially Participate" in the business as well as noting that the investment is "At risk" if there is a loss (32a)? That's the method by which the IRS is going to classify your income reported on Schedule C. If you lost money, the At Risk tells the IRS that you can net the loss against other ordinary income. Still awake?
- One thing EM glossed over in her opening. The 8960 line 4a AND 4b are designed to total up business activities, like being a landlord, contractor, etc. and then take the (and I hate this word) nonpassive activities out. The IRS' process is seeing an amount in line 4a and freaking out because it assumes this is from rent. So even the the form shows the hokey-pokey of your schedule C money, it can't get over the fact there is no Schedule E income. That is what the IRS has to fix and you would think that shouldn't be a big deal.
