pkcpa
Level 2

The credit card processing company includes tips and sales tax in the 1099-K box 1a amount.

If the sales reported on the 1120S is less than the 1099-K amount will this generate an IRS inquiry?

I believe that some preparers gross up the sales (and cost of sales) by the tip and sales tax amounts

but I hesitate to do this.

Thanks for your advice! 

 

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