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I am just the organizer of a convention and I have elected…

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I am just the organizer...
I am just the organizer of a convention and I have elected to use PayPal to ease in the payment process. I was advised that I will receive a 1099K for the Payments that I have received. Do I need to file something with the IRS or what do I need to do?
Submitted: 2 years ago.Category: Tax
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1/23/2016
Tax Professional: emc011075, Tax adviser replied 2 years ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,686
Experience: IRS licensed Enrolled Agent and tax instructor
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Hi. My name is ***** ***** I will be happy to help you.

How much was deposited on your PayPal account?

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Tax Professional: emc011075, Tax adviser replied 2 years ago

If the payment was less than 20K, no 1099K will be issued. If you received any type of income for services provided (like organizing a convention), regardless if you get 1099K/1099Misc or not, you are required to report it on your tax return. You can offset the income with expenses you had.

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Customer reply replied 2 years ago
According to the 1099K, roughly $91,000
Customer reply replied 2 years ago
I do not take ANY payment for organizing the convention...
Customer reply replied 2 years ago
The Money all goes to pay for the actual convention itself...and the convention newsletter...Zero Profit.
Tax Professional: emc011075, Tax adviser replied 2 years ago

Ok. So what was deposited into your paypal account?

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Tax Professional: emc011075, Tax adviser replied 2 years ago

Where the money came from? From who?

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Customer reply replied 2 years ago
Basically the Convention cost is put into the PayPal account (Which I am ONLY the organizer) and then transferred to the bank so that we can write a check for the convention.
Customer reply replied 2 years ago
The money comes from the convention participants...It is more like a reunion than a convention...
Tax Professional: emc011075, Tax adviser replied 2 years ago

Ok, I see. If you didn't organize the convention, what did you organized?

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Customer reply replied 2 years ago
I used PayPal for its accounting ability and so that I didnt have to process 500 checks via snail mail...I guess that I "Organized" the convention, but I get nothing personally from it...
Tax Professional: emc011075, Tax adviser replied 2 years ago

Ok. If you organized a convention, regardless if you made any profit or not, and received contributions, the contributions are considered your income. You will report the income on schedule C and deduct your expenses to arrive at your net profit or loss. If you used all the money for convention expenses, you shouldn't have any profit but you will still have to claim the activity on your tax return.

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Tax Professional: emc011075, Tax adviser replied 2 years ago

PayPal is required to report accounts with deposits over 20K or with more than 200 deposit. With 500+ deposits IRS will be looking for some type of income on your tax return. You cannot ignore it.

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Tax Professional: emc011075, Tax adviser replied 2 years ago

Any questions? Is there anything else I can help you with today?

I know it is not the answer you were hopping for, but that's the easiest way to keep IRS of your back and avoid future complications. PayPal with send 1099K to IRS and IRS softwares will be looking for a match on your tax return, just like with W2s or other tax forms. If the amount is not reported on your tax return, you will receive a notice that more income was reported from third parties and your return had been recalculated. You will receive a bill and you will have two options. Agree with IRS and pay the bill or amend the return and fix it. If you report it correctly now, you can avoid future hassle with IRS.

Anyway 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.

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