How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask emc011075 Your Own Question
emc011075, Tax adviser
Category: Finance
Satisfied Customers: 2189
Experience:  IRS licensed Enrolled Agent and tax instructor
Type Your Finance Question Here...
emc011075 is online now
A new question is answered every 9 seconds

I had a question about my current situation. It seems like I

Customer Question

I had a question about my current situation. It seems like I was audited by the IRS for not reporting a 1099K (from paypal for selling online) for the 2014 tax year. Is there any way to appeal the fact that I never received any notification about this form by Paypal or even remotely mentioned it during my time selling? Because of this my bill from the IRS is $11k! I really can't afford that (let alone most people!) I only make $50k and with other things to worry about financially besides this ridiculous revelation. I also want to know what I should gather in order to prepare myself towards engaging contact with the irs (I want to make sure i'm covering ALL of my bases here!)
Submitted: 4 months ago.
Category: Finance
Customer: replied 4 months ago.
i meant to say I currently make $50k/year with my current job. I recently just found my 1099k form under my paypal account and I noticed only the sales/revenue is mentioned on it. It reports i've made $33k in total sales but they never added the expenses (i estimate off the top off my head the expenses I currently have documented is about $10-12k.
Expert:  emc011075 replied 4 months ago.

Hi. My name is ***** ***** I will be happy t help you.

You cannot appeal until IRS make final decision. Usually you have 30 - 60 days to respond and challenge IRS correction to your return. You will have to get the copy of 1099K IRS received by requesting IRS transcript and amend your return. You will have to use Schedule C to claim income and expenses associated with sale online. Attach the amended return to the notice and mail it back to the address provided on the notice. Make sure you check the box that you disagree with the changes and on the top of the 1040X write the number of the notice. I am assuming it is CP2000 (right upper corner of the notice)

Expert:  emc011075 replied 4 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

Customer: replied 4 months ago.
Can you please tell me more about "schedule C"? How to I amend a return?
Expert:  emc011075 replied 4 months ago.

Schedule C is form that is used to claim profit and loss from a business. It is used for income from a side job or other activities that generates income, like selling or re-selling stuff on e-bay or amazon.

You will amend your return by filing form 1040X.

If you used tax preparation software to prepare your 2014 tax return, you can use it to amend your return. Schedule C could be little tricky but depending on what you sold.

Expert:  emc011075 replied 4 months ago.

Any questions?

Expert:  emc011075 replied 4 months ago.

I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.

Related Finance Questions