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 Wallstreet Esq. Your Own Question
Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
16356563
Type Your Tax Question Here...
Wallstreet Esq. is online now
A new question is answered every 9 seconds

Nguyen 2205-A gross receipts or sales issue, I got a 2205-A

Customer Question

Nguyen 2205-A gross receipts or sales issue
JA: Thanks. Can you give me any more details about your issue?
Customer: I got a 2205-A from IRS asking for audit the issue on their letter is my Schedule C1- Gross receipts or sales I did tax myself that year and I wonder if this could be a red flag got 1099-K from creditcard processor around 600k filed a 1095 and issued back about 325k to contractors via 1099 MISC's
JA: OK got it. Last thing — Tax Professionals generally expect a deposit of about $32 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 9 months ago.
Category: Tax
Customer: replied 9 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  R. Klein, EA replied 9 months ago.

Nguyen:

Frequently an audit of this nature is triggered by a discrepancy between what you reported on your return and what third parties report on the 1099's sent to the IRS.

Sometimes this can be caused by duplicate reporting requirements, and other times it can be due to your accounting method. If the IRS receives 1099s totaling 1 million dollars paid to you and you report only 650,000 in gross sales, this would be a problem.

Expert:  R. Klein, EA replied 9 months ago.

Certainly if you had 650K in payments reported to you from the credit card processor and you show on your return that you received only $500K in sales, this is a problem.

Be aware that once the IRS opens an audit case, almost every time they start probing into other areas of the tax return. They are not limited to auditing just the one item the letter mentions. For this reason, it is often wise to hire a representative who understands how to manage the examination.