The IRS is constantly looking for ways to nail tax-cheats and they’ve come up with a doozy.
I’m talking about the 1099-K. This is the form that banks and others send to the IRS telling the IRS how much they remitted to you for your credit card, debit card, and similar transactions. The 1099-K reports the gross amount of transactions including credit-card sales, sales tax, shipping, and other fees or charges to customers. And that’s just for starters!
The bottom line?
If you’re hiding income from the IRS, there are two things you should do immediately:
- Stop!
- Read my new article titled Tax Tips: Yikes! New IRS Audit Tool: The Form 1099-K Letter!
Three ways our fact-filled article can help you:
- You’ll learn how to avoid Eric Kahmann’s fate. The Kahmann case provides a great example of how the IRS used the 1099-K as a weapon (in coordination with its bank deposit method). The result? Kahmann’s Schedule C taxable income was increased from $10,933 to $70,936! We’ll show you how to stay out of trouble when you read the full article.
- We’ll explain why you’ll never want to get a Form 1099-K letter. This unwelcomed letter is sent to businesses with lower than expected income based on the IRS’s analysis of your Form 1099-K. You’re getting the letter because the IRS wants to verify that your 1099-K amounts were properly reported. You’ll get the whole story when you read the full article.
- We’ll tell you how to respond to Form 1099-K letters. Actually, the IRS has developed three letters, one of which you may be unlucky enough to receive. That’s when the fun begins. Defending yourself. Verifying information. Answering probing questions. We’ll tell you how to answer the letter correctly and avoid trouble when you read the full article.