What is the notice you are referencing?
A relative and client (I am an atty but not a tax atty) got a notice stating that in 2010 he received $34xxx in non-employment compensation and he owes tax of about $12xxx on it. The compensation was reported to the IRS by REALOGY CORPORATION in Parsippany NJ. My client is a scientist at Monsanto and his wife does not work.
The relative received non-employee compensation from Realogy and needs to potentially amend year ended 2010 tax filing. I state amend because (1) I do not believe the notice would have been received had the earnings been reported on the tax return as originally filed and (2) the relative should amend the tax filing to include the income from Realogy not previously reported but also to include any expenses incurred in earning this income. By including expense items you should bring the tax liability down considerably. This information will need to be reported on Schedule C.
Some expenses that may need consideration include a percentage of housing and utilities if the taxpayer did not have an office outside of their residence and used space in their residence in earning this income.
The relative says he did NOT receive any non-employment compensation whatsoever. He works for Monsanto and pays income tax in full. Who is REALOGY?
Ah the relative is stating this information is erroneously reported to the IRS correct?
Realogy provides real estate and relocation services. IF this income is erroneously reported to the IRS, your relative should communicate this information to the IRS to allow the IRS to communicate with Realogy. More often than not there is a simple transposition of social security numbers causing the erroneous reporting on your relatives IRS account.
Thank you. I thought it was something like that. Is this ever done fraudulently or is it always just the result of mistakes?
Both but more often than not in error.
What is the BEST WAY for this person to let the IRS know this info? They just act like he either really owes the money (e.g. no help) or they tell him HE WILL have to deal with Realogy.
Phoning(NNN) NNN-NNNN Your relative may provide copies of bank statements in order to validate lack of receipt of the money. Also could communicate with Realogy as this would be a good path if this is due to fraudulent activity.
VERY GOOD. thank you.