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.

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!

Does anyone know how the IRS even finds these fake businesses? Like, what triggers them to look at someone's return?

Your neighbor is walking into a financial disaster. What he's describing isn't a "brilliant tax strategy" - it's textbook tax fraud that the IRS specifically targets. The IRS has sophisticated algorithms that flag exactly this type of behavior: new LLCs with no real revenue, excessive business deductions that offset W-2 income, and patterns that don't match legitimate business activity. They're especially good at catching "hobby businesses" or shell companies created solely for tax avoidance. The fact that he's openly bragging about it makes it even worse from a legal standpoint. If audited, the IRS will want to see: - Proof of business purpose for every expense - Documentation showing exclusive business use (for home office) - Evidence that meals were actual business meetings - Legitimate business activity generating income Without these, he's looking at owing all the back taxes plus penalties that can range from 20% to 75% of the unpaid amount. In severe cases of willful fraud, there can even be criminal charges. The IRS gives people enough rope to hang themselves with - they'll often let this behavior continue for a few years before striking. When they do audit, they typically go back 3-6 years and scrutinize everything. Your neighbor needs to stop this immediately and consult with a legitimate tax professional to clean up his situation before it gets worse.

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.

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.

There's another important factor to consider: SBTPG's batch processing schedule. They typically transmit funds to banks in specific windows (10am, 2pm, and 6pm Eastern Time are common processing times). If your trace number appeared after today's final batch, it will go in tomorrow's first batch. Also, be aware that SBTPG's system sometimes shows the trace number before they've fully processed your refund - the status should change to "Funded" when it's actually been sent to Chime. This can affect ACH transfer timing significantly.

I'm in a similar situation right now! Got my SBTPG trace number yesterday evening and have been refreshing my Chime account every hour since then. Based on what everyone's saying here, it sounds like I should see the deposit by tomorrow morning at the latest. This is my first time using TurboTax with the refund processing fee option, so I wasn't sure what to expect with the timing. Really helpful to see all these real experiences with the SBTPG → Chime timeline. Fingers crossed we both wake up to good news tomorrow!

For those who have been through this before: Does having the trace number guarantee the money will arrive on the DDD? Here's what I understand so far: Step 1: IRS approves refund (shown on transcript) Step 2: IRS sends money to SBTPG (the "funded" status) Step 3: SBTPG issues trace number Step 4: Money arrives at Chime Is there anything else that could delay it at this point?

Thanks for sharing your timeline - this is really helpful for those of us waiting! I'm in a similar situation with a cycle 05 transcript that updated Friday, but I haven't gotten my trace number yet. SBTPG shows "funded" as of yesterday evening. Quick question: did you have to keep refreshing the SBTPG portal to see the trace number, or did they send you any kind of notification? I'm trying to figure out if I should be checking constantly or if there's a better way to monitor the progress. Also hoping my funds come through soon since I have some urgent expenses coming up too.