Education

[rcooley25]

Right now as I am entering this I am having a break from my training with NATP. According to them by the late next year we are going to have a allamerican headache with something called 1099K. Any body for retirement?

[ljr]

I'm on the same class and all I could think about was OMG here we go 

[Just-Lisa-Now-]

Looks like increased revenue for us from where Im standing.

[BobKamman]

The problem isn't going to be clients who bring you a 1099-K.  It's going to be the clients who receive a 1099-K but don't tell you about it.,  

[George4Tacks]

An increase off season revenue stream to respond to IRS Notices? 

[IRonMaN]

What's a 1099K?  Is it a new Kellogg's breakfast cereal to expand on it's Special K line?

[abctax55]

I will be adding a specific question re: F 1099-K to my organizer.  If it isn't provided, and 'shows up later' after an IRS notice then hell yes, I'll bill them for responding.

Just another PITA to reconcile.

[TaxGuyBill]

I think it is interesting how much commotion there is about the 1099-Ks

(1) When the 1099-K-s first came out, the IRS specifically said they will NOT send out automated notices if there isn't an exact match with 1099-Ks.  While we don't know what will happen next year, I would THINK the IRS would be smart enough continue with that directive and not send a CP2000 to everybody that received a 1099-K and the IRS didn't see it on their tax return.

(2) Nothing really changes for us for reporting.  We should still be reporting things accurately, including personal non-deductible sales on Form 8949/Schedule D.

(3) Several states already have had lower 1099-K reporting requirements.  I haven't seen comments about an abundance of IRS notices in those states.  However, it would be interesting to hear from those tax preparers that are in those state with lower reporting requirements.

https://stripe.com/docs/connect/1099-K

[abctax55]

Bill, I have had a few notices when the F 1099-K was higher that gross receipts.  Almost exclusively for restaurants/bars where folks seem to have switched over to paying with credit cards rather than cash.  With the sales tax & tips included on the F 1099-K the difference can be substantial.  One response would clear it up, but those notices scare clients. 

Yep the IRS is 'supposed' to get it, but not always.   The new lower threshold may become low hanging fruit for the IRS and I'd like to know in advance if there 'might' be an issue so I can warn clients in advance.

Thus, my organizer question - and I'm hopeful maybe just a few clients will answer it /S 🙂

[BobKamman]

I hope you're not saying that you report losses on personal-use property. That might have to be done now, though, for people who choose eBay over yard sales. 

IRS will probably have a minimum for sending a CP-2000 on 1099-K transactions.  It will probably start out high -- maybe $20,000, so with income and SE tax, the assessment would exceed $5K and they could add 20% penalty.  The reason that $600 is the reporting minimum is that some people will get statements from multiple payers. Commissioner Werfel should be asked at confirmation hearings whether Schedule D will have a line for "amount of sales reported on Form 1099-K that were personal-use assets sold at a loss."  But he won't be. 

[rcooley25]

It is a new form that after you have delt with it you go and indulge yourself in fireball ball whiskey

[rcooley25]

When was the last time the IRS did anything smart?

[dascpa]

I want those IRS notices.  I NEED those IRS notices.  My wife wants to remodel the kitchen.......

[Dusty2]

Bill:

I have had 2 clients that received IRS notices with regard to 1099-K notices.  They are starting. Both with 1099-K over $20,000, one of them was for $40,000.

Dusty

[TaxGuyBill]

If the amounts are a large difference, yes, the IRS may send out a notice.  But from what I've read, if the amounts are a minor difference, nothing is sent out.

Do any of you live in a State that has lower requirements?  I haven't read of any complaints from preparers about IRS notices for small 1099-Ks.  Have you?

[abctax55]

Bill, I don't even know what CA's reporting limit is.   I reconcile & "fix" someway if the client brings me the 1099-K.  But with the new, lower $ 600 amount for Ebay-ing etc I anticipate issues with the IRS and with clients not bringing in the info.  I hope you are right that they'll just ignore the small stuff 🙂