I have spent so much time on this it is ridiculous. I've talked to so many FIOS people who are clueless and even had a tech out. I've spent a lot of time tryingg to research the issue and it seems the VOIP is the issue. At this point I seem to be able to send but not receive. So I'm going to sign up for Packetel online fax service at $3.95 / month, ditch the distinctive ring number which saves me $5 per month and send faxes on my home number if I need to send something out.
Other FIOS services have been good but I have been disappointed with the verizon support. Very tedious and lack knowledge about their products.
As far as HP I could not get winfax to work either so I might as well call Microsoft too. Actually I think I'll just move on. the Packetel solution is much better anyhow since I get the fax in PDF form on my PC.
Let me know if you ever figure it out.