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If ur worried about criminal charges dont be. The IRS almost never pursues criminal tax evasion unless ur hiding millions or deliberately committing fraud. What ur describing is just failure to file which is bad but not criminal bad. Just get those returns filed ASAP and be honest about everything. If u cant pay what u owe right away, the IRS is actually pretty reasonable about payment plans. The interest and penalties suck but its better than continuing to hide from them.
Hey Butch, I totally get the panic - I was in almost the exact same situation about 3 years ago. Hadn't filed for 8 years due to a mix of 1099 work confusion and then just pure avoidance. The good news is it's way more fixable than your anxiety is telling you right now. A few things that might help ease your mind: First, the fact that you've been claiming zero deductions on your W-4 for 6 years is actually huge in your favor. You've likely been overpaying taxes this whole time, which means some of those years you might not even owe anything (or could have been due refunds). Second, the reason you haven't heard from the IRS isn't necessarily weird - their systems are incredibly backlogged and if your current job withholding has been covering your tax liability, you might not have triggered their automated collection notices. My advice: Start with getting your wage and income transcripts from the IRS website (it's free and won't trigger anything). This will show you exactly what income was reported under your SSN for all those years. Then you'll have a much clearer picture of what you're actually dealing with instead of just imagining worst-case scenarios. You've got this - it's scary but totally manageable once you start taking action.
Has anyone tried getting PayPal to issue a corrected 1099-K? I'm having the exact same issue where they're counting my DraftKings withdrawals as business income.
Good luck with that. I tried for months to get PayPal to correct mine. Called multiple times, sent emails, even had my accountant contact them. They just kept telling me "we report based on our system categories" and wouldn't budge.
This is such a frustrating situation that unfortunately many people are dealing with. PayPal and other payment processors often categorize gambling transactions incorrectly because their systems aren't designed to distinguish between different types of money transfers. A few additional points that might help: 1) When working with your tax professional, make sure they're familiar with gambling tax issues specifically. Not all tax preparers understand the nuances of how payment processors report gambling transactions. 2) Consider requesting your complete PayPal transaction history going back to 2020 and cross-reference it with your gambling site records. Sometimes the discrepancy between what PayPal reported ($170k) and your actual withdrawals ($285k) is because they're only counting certain types of transactions or excluding some transfers. 3) If you haven't already, document EVERYTHING - screenshots of your betting account histories, bank statements showing transfers to/from PayPal, and any correspondence with PayPal about the issue. 4) You might also want to consider filing a complaint with the Consumer Financial Protection Bureau (CFPB) against PayPal for incorrect reporting. While it won't immediately fix your tax situation, it creates an official record of the issue. The fact that you have win/loss statements and transaction logs is great - that documentation will be crucial in proving your case to the IRS. Don't give up!
This is really helpful advice! I'm dealing with a similar issue where Venmo is reporting my poker winnings incorrectly. The CFPB complaint idea is interesting - I hadn't thought about creating an official record of the payment processor's error. One question though - when you mention getting complete PayPal transaction history, is there a specific way to request this? I've been trying to get more detailed records from Venmo but they only seem to provide basic transaction summaries. Having the full history like you described would definitely help me cross-reference with my gambling site records. Also, @764e0abb033b do you know if there's a statute of limitations on how far back the IRS can go with these kinds of discrepancies? I'm worried they might start questioning my returns from previous years too.
Tax professional here: This is standard procedure for Louisiana's verification program. They randomly select returns to verify income reporting accuracy. Best practices: 1) Send copies not originals 2) Use certified mail 3) Keep proof of mailing 4) Include letter reference number on all docs 5) Make copies of everything you send. Average processing time after docs received is 30-45 days. Pro tip: Use taxr.ai to analyze your federal transcripts first - it can help identify any discrepancies that might trigger state reviews. Worth the $1 cost to avoid headaches later.
Same thing happened to me last year! I was freaking out at first but it really is just routine. Louisiana does these verification checks pretty regularly. I sent in copies of everything they requested and got my refund about 5 weeks later. Just make sure you respond within their deadline - I think they give you like 30 days to send the docs. Don't stress too much about it!
Just want to add that if the father suddenly decides to file taxes after several years of not filing, he could face penalties and interest from the IRS for those missed years. If he pushes this issue, it might end up costing him more than whatever he'd get from half the child tax credit.
This is an important point. The IRS can look back 6 years typically (sometimes more if they suspect serious issues). He might be opening himself up to scrutiny by suddenly filing again after a gap.
The bottom line is that your girlfriend has no legal obligation to share the child tax credit with her ex, especially since he hasn't been filing taxes for years. The IRS rules are clear - whoever claims the child as a dependent on their tax return gets the credit. Since she's already filed and received her refund, and he hasn't filed taxes in 4-5 years, there's no mechanism for him to claim the child or the credit unless he suddenly decides to file this year. Even then, his return would likely be rejected since she already claimed the child. The 50/50 custody arrangement doesn't automatically entitle him to half the tax benefits. Tax law and custody arrangements are separate issues. Unless they have a written agreement or court order specifically addressing how tax benefits should be split, she's under no obligation to share. If he's serious about wanting tax benefits, he should start filing taxes consistently and they can work out an alternating years arrangement for future tax seasons. But for this year, the credit is rightfully hers since she's the one who actually filed and claimed the child.
Ravi Patel
Pro tip: upload your stuff to taxr.ai - saved me so much stress with my CP05. It actually predicted when my refund would hit within 2 days! Better than playing guessing games tbh
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Freya Andersen
ā¢for real? might have to check this out
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Makayla Shoemaker
That letter about the amended return and frivolous filing penalty is really concerning - especially since you never filed an amended return! This sounds like identity theft or the IRS mixed up your case with someone else's. I'd definitely call that number (866-883-0235) ASAP to get this sorted out. Don't worry about it delaying your refund - if someone filed fraudulent documents under your SSN, that needs to be addressed immediately. Document everything and ask for a case number when you call. The CP05 might actually be related to this mix-up rather than normal verification.
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Taylor Chen
ā¢This is really good advice! @Amina Bah you should definitely call that number - the combination of CP05 + a letter about an amended return you never filed is a huge red flag. Could be identity theft or they mixed up your case with someone else. Better to get it sorted now than wait and have bigger problems later. When you call, ask them to verify what documents they have on file for your SSN and get everything in writing!
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