I'm wondering if it matters that the OP only made $13.5k as a substitute teacher? Isn't that below the filing threshold anyway? Maybe they wouldn't have owed taxes regardless of this fake business?

This is absolutely tax fraud, and you need to act quickly to protect yourself. The fact that the preparer was so casual about creating a fictional business shows this isn't their first time doing something like this - which is terrifying. Here's your immediate action plan: First, file Form 1040-X (amended return) to remove the fake business loss. Even if you end up owing some taxes, it's infinitely better than having fraudulent information on your return. Second, report this preparer using Form 14157 and consider contacting your state's tax preparer licensing board if they have one. The good news is that with only $13,500 in income, you're likely under the standard deduction anyway, so you probably won't owe much (if anything) once you remove the fake business. But don't wait - the longer fraudulent information stays on your return, the worse it looks if the IRS discovers it during an audit. Document everything - save copies of your original return, any communications with the preparer, and notes about what happened. This will help if you need to prove you weren't complicit in the fraud. The preparer's casual attitude about this suggests they've done it before and will do it again to other unsuspecting clients.

Something everyone's missing - if you win under like $600 at blackjack, the casino doesn't report it to the IRS so nobody would ever know if you didn't report it. Just saying... the IRS has bigger fish to fry than someone who won $270 playing cards lol

I just went through this exact situation last year! Won about $400 at a poker tournament and was totally confused about reporting it. Here's what I learned: Yes, you technically need to report ALL gambling winnings as income, even your $270. The threshold for casinos to issue a W-2G is $1,200+ for most table games, but that's just when THEY have to report it - you still owe taxes on smaller amounts. For your situation, report it as "Other Income" on Schedule 1 of Form 1040. The tricky part is you can deduct gambling losses against winnings IF you itemize deductions (not just take the standard deduction). So if you lost money gambling elsewhere during the year, keep those records! Honestly, for $270 the practical risk is low, but it's better to be safe than sorry. Plus once you start reporting gambling income properly, you'll be prepared if you ever hit bigger winnings in the future. Just make sure to keep better records going forward - date, location, amount won/lost, type of game. Your phone camera is your friend for documenting everything!

If I bought actual gold coins for my security and later gave them to my sons, would that be a taxable transfer?

This is a really common situation and you're smart to think about the tax implications beforehand! The good news is that since you're already a joint owner on the account, transferring money from it to your personal account generally isn't considered a gift for tax purposes - you're essentially moving funds you already have legal ownership of. The key here is documenting that this is reimbursement rather than a gift. I'd recommend creating a simple written agreement with your parents before the transfer stating something like "This transfer of $135,000 represents reimbursement for medical bills, home repairs, and assisted living costs paid by [your name] on behalf of [parents' names] between [date range]." Keep all your receipts and records of the expenses you covered - medical bills, repair invoices, assisted living statements, etc. This creates a clear paper trail showing this is repayment of actual out-of-pocket expenses you incurred. One practical tip: if you're transferring a large amount, your bank might flag it and ask questions. Just be prepared to explain it's family reimbursement. Banks have reporting requirements for large transfers, but that doesn't mean there are tax consequences. The documentation is really your best protection here. With proper records showing this as expense reimbursement rather than a gift, you should be in good shape from a tax perspective.

This thread has been incredibly helpful for understanding the sports betting tax situation! I'm dealing with something similar - DraftKings winnings that went through multiple payment apps before landing in my bank account. One additional point that might be worth mentioning: if you're in a state where sports betting just became legal recently, make sure to check if there are any state-specific reporting requirements that differ from federal rules. Some states have their own thresholds for tax forms or additional documentation requirements. Also, for anyone reconstructing their records like several people mentioned, don't forget to check your email! Most betting platforms send confirmation emails for deposits, withdrawals, and significant wins. Those emails can help fill in gaps if your platform's transaction history doesn't go back far enough or if you're missing some bank statement details. The timing aspect is crucial too - make sure your gambling log reflects the actual date winnings were credited to your account, not necessarily when you placed the bet. This becomes important when transactions cross tax years or when there are delays between winning and receiving funds. Thanks to everyone who shared their experiences and resources. This is exactly the kind of real-world guidance that's hard to find elsewhere!

This has been an incredibly thorough discussion that really highlights how complex sports betting taxation has become with all these payment apps involved! I'm dealing with a similar situation - ESPN BET withdrawals that went to Venmo, then to my bank account. One thing that hasn't been mentioned yet is the importance of keeping screenshots of your betting platform account summaries, especially the "tax documents" or "annual summary" sections that most platforms have. Even if they don't generate formal tax forms like W-2Gs, many platforms provide unofficial summaries that show total deposits, withdrawals, and net position for the year. I learned this the hard way when trying to reconstruct my records - some platforms only keep detailed transaction histories for 12-18 months, but they often keep annual summaries longer. Taking screenshots now (before platforms purge older data) could save a lot of headaches later. Also, for anyone using multiple sportsbooks, consider keeping a master spreadsheet that consolidates activity across all platforms. This makes it much easier to calculate your overall net gambling income and ensures you don't accidentally double-count transfers between platforms and payment apps. The resources mentioned in this thread (taxr.ai, Claimyr) seem really valuable for people with complex situations. Thanks to everyone for sharing their experiences - this is exactly the kind of practical advice that's impossible to find in generic tax guides!

Hey Ezra! Just wanted to add my voice to this incredibly helpful thread. As someone who works in tax prep during busy season, I see SO many CP303 notices for first-time filers - you're definitely not alone in this experience! One thing I didn't see mentioned yet is that you should receive a revised account transcript reflecting the changes they made. This is really useful to keep in your records alongside your payment confirmation. You can access it through your online IRS account once it's updated (usually within a few weeks of payment). Also, since you're just starting out with taxes, I'd recommend keeping a simple spreadsheet or document with notes about what happened this year. Jot down things like "claimed $2500 student loan interest but only paid $1750 - use exact amount from 1098-E next year." These little reminders can be lifesavers when you're filing next year and trying to remember what went wrong previously. The fact that you handled this so proactively and used this thread to learn shows you're going to be just fine with taxes going forward. Most people just panic and ignore notices, but you asked questions, got informed, and took action. That's exactly the right approach for any financial responsibility!

Congrats on handling your first CP303 notice so well, Ezra! This thread has been such a great example of how the community can help newcomers navigate confusing tax situations. I just wanted to add one more tip for anyone else who might be dealing with their first IRS notice: don't be afraid to call the number on the notice if you're genuinely confused about something. I know several people mentioned the long wait times, but sometimes a quick 10-minute conversation with an IRS representative can clear up confusion that might take hours of research online. Also, for future reference, the IRS usually sends notices via regular mail, never via email or text. So if you ever get electronic communications claiming to be from the IRS asking for payments or information, those are scams. Always verify by checking your online IRS account or calling the official number. It's been really heartening to see how this community rallied around a first-time filer with practical advice, reassurance, and shared experiences. This is exactly the kind of support that makes dealing with government services less intimidating for everyone!