Received a 1099A form from a renter? What does this mean?

Could this be one of those sovereign citizen type tax scams? I've heard about tenants trying weird stuff like this before. Do you think OP needs to report this to the IRS directly or just ignore it since it's clearly wrong?

Wait, I'm confused. So the tenant is trying to claim that the landlord borrowed money from him? How would that even benefit the tenant tax-wise? Wouldn't the tenant want to deduct rent payments instead?

This does have hallmarks of sovereign citizen or tax protestor schemes. The OP should definitely not ignore this - improper tax forms that include your information should be addressed. I would recommend contacting the IRS to report the improper form. The IRS has specific procedures for reporting suspected tax fraud. These schemes typically involve trying to create fictional loans or trusts and then using IRS forms incorrectly to claim the tenant is somehow a lender or creditor. The tenant might be trying to claim they've "discharged a debt" (your supposed loan) through their trust, which isn't how legitimate taxes work.

Thank you so much for explaining this! I had a feeling something wasn't right. I've never borrowed money from this tenant, so it makes zero sense why I'm listed as a borrower. I'm definitely going to contact the IRS about this. Do you think I should also confront the tenant directly about this or just deal with the IRS and leave him out of it until they investigate?

I would be cautious about confronting the tenant directly before speaking with a tax professional or the IRS. Document everything, including rent payment history and any communications. When you do communicate with the tenant, keep it professional and focused on the improper form rather than accusations. Something like "I received this 1099-A form which appears to be filed incorrectly as there is no lending relationship between us." This creates a paper trail showing you've addressed the issue.

Did taxr.ai actually help you communicate with the IRS or did they just give you information? I'm dealing with something similar where a short-term renter is trying to claim they "gifted" me money instead of paying rent to avoid some tax obligation.

Is this legit? I checked out the website but I'm skeptical about sharing tax info with random online services. Did you have to upload your actual tax documents and personal info?

They provided me with a complete analysis of the situation, including the specific tax code sections that were being misused by my tenant. They didn't communicate with the IRS for me, but they gave me everything I needed to handle it myself confidently. Their explanation of the "gift" vs. "rent payment" distinction would definitely help in your situation. I completely understand the skepticism. I was hesitant too. They have a secure document upload system, and you can actually black out personal identifying information that isn't relevant to the analysis. Their privacy policy was pretty solid, and they don't share your information with third parties. The analysis they provide is worth it for the peace of mind, especially when dealing with potentially fraudulent tax situations.

How does this even work? IRS phone lines are always jammed. Are they somehow jumping the queue or do they just automate the holding process?

Yeah right. Sounds like another scam to me. You expect me to believe some random service can magically get through to the IRS when millions of people can't? I'll believe it when I see it.

They don't jump the queue - their system essentially waits on hold for you using automated technology. When they reach a real person, they call you and connect you directly to the IRS agent. It's basically like having someone else do the holding for you, which is why it's so helpful if you can't sit around for hours with your phone on speaker. I understand your skepticism completely. I felt the same way. But the service is legitimate - they're mentioned in national news outlets and have thousands of reviews. They simply use technology to handle the wait time so you don't have to. The video demo I linked shows exactly how it works. It saved me about 3 hours of hold time when I needed to talk to the IRS about the fraudulent 1099 form my tenant filed.

Thank you for this info! I just looked up "Redemption Theory" and wow, there's a whole weird world of these tax protestor schemes. It sounds exactly like what my tenant is trying to do with this supposed "trust" that can magically pay his rent. Would you recommend I also notify the tax preparation service that helped him file this form? Seems like they should know better than to submit obviously fraudulent tax documents.

Absolutely notify the tax preparation service. Any legitimate tax service should have safeguards against filing these kinds of improper forms. If they knowingly assisted in filing a fraudulent form, they could face penalties themselves. Most major tax preparation companies have fraud departments specifically for this purpose. Contact them with the details and explain that their service was used to file an improper 1099-A in a situation where no lending relationship exists. Include the specific information about it being part of a Redemption Theory scheme.

While giving benefit of the doubt is nice, the specific pattern described (listing landlord as borrower, using a "trust" to pay, exact amounts matching rent) matches known tax scams too perfectly. Tax software doesn't randomly guide people to issue 1099-A forms to their landlords - this requires deliberate actions. The IRS has specifically warned about schemes involving trusts and improper use of forms like 1099-A, 1099-OID, and 1099-MISC as part of sovereignty/redemption scams. These aren't innocent mistakes.

Great questions! As someone who's been dealing with rental properties for a while, here are some red flags to watch for: tenants who mention "trusts" paying their rent, ask about your SSN or business tax ID for "their records," or start talking about "discharging debts" instead of paying rent normally. While these scams aren't super common, they're definitely increasing. I'd recommend familiarizing yourself with the basics - just knowing terms like "Redemption Theory" and "Strawman" schemes can help you recognize them early. For lease protection, consider adding a clause stating that tenants cannot use your name, SSN, or business information on any tax forms without written consent, and that any improper tax filings will be considered a lease violation. Also specify that rent payments are exactly that - payments, not loans, gifts, or discharges of fictional debts. The resources mentioned here are definitely worth bookmarking. Better to have them and not need them than the other way around!

This is really eye-opening - I had no idea these schemes could escalate to property liens! That's absolutely terrifying as a property owner. Thanks for mentioning checking with landlord insurance about fraud coverage - I never would have thought to ask about that specifically. It's disturbing how sophisticated these scams have become. The fact that they're using official tax forms makes them seem legitimate to people who don't know better. I'm definitely going to be much more vigilant about any unusual requests from tenants regarding tax information or payment methods. Do you know if there are any landlord associations or groups that track these kinds of schemes? It seems like having a network of landlords who can share information about new scam tactics would be really valuable for staying ahead of these situations.

This is incredibly valuable information - thank you for sharing all these resources! I had no idea there were landlord networks specifically tracking fraud schemes. I'm definitely going to look into joining NARPM and my local real estate investor group. The warning signs you listed are really helpful too. It's scary how these scammers have specific language they use to sound legitimate. I never would have thought that asking for an EIN "for their records" could be a red flag, but now that you mention it, there's really no legitimate reason a tenant would need that information. I'm also going to follow those IRS accounts you mentioned. It seems like staying informed about emerging scams is just as important as knowing the rental laws in my area. The more I read about these schemes, the more I realize how important it is to be proactive rather than reactive. Thanks to everyone in this thread for being so generous with sharing their experiences and knowledge. As a new landlord, this has been an eye-opening education about risks I never knew existed!

Thank you for this comprehensive advice! As someone new to dealing with rental properties, I really appreciate the step-by-step action plan. The point about not letting it slide is especially important - I can see how easy it would be to just ignore weird paperwork and hope the problem goes away. One question: when you mention sending written notice to the tenant about reporting the improper form, should this be sent via certified mail to create a paper trail? I want to make sure I'm documenting everything properly in case this escalates further. Also, do you have any experience with tenants retaliating after being confronted about these schemes? I'm a bit worried about how the tenant might react once they realize I'm taking action against their fraudulent filing.

Absolutely send any written notice via certified mail with return receipt requested. This creates an official record that the tenant received your communication and shows you're taking the situation seriously. Keep copies of everything for your records. Regarding retaliation - yes, I have seen tenants become hostile when confronted about these schemes, but in my experience they usually back down once they realize the landlord is informed and taking proper action. Sometimes they'll try to double down with more fraudulent paperwork, but that just gives you more evidence to provide to authorities. The key is staying professional but firm. Don't get drawn into arguments about the legitimacy of their "trust" or try to educate them about tax law. Simply state the facts: no lending relationship exists, the form was improperly filed, and you've reported it to the IRS. Most scammers will look for easier targets once they see you're not confused or intimidated. Document any retaliatory behavior as well - it can be useful if you need to pursue eviction for non-payment of rent while they're playing these games.

Wow, your situation sounds almost identical to what the original poster described! The fact that your tenant is asking for your business EIN is a huge red flag - there's absolutely no legitimate reason a tenant would need that information to pay rent. That's definitely part of the scheme to use your business information on fraudulent tax forms. The "promissory note" from a "private trust" is classic redemption theory language. These scammers use official-sounding documents to create the illusion that they're making legitimate payments when they're really just trying to avoid paying rent while hiding behind fake paperwork. You're absolutely right to follow the action plan outlined in this thread. Don't give him your EIN under any circumstances, and definitely document his request for it as part of the fraudulent scheme. The sooner you report this to the IRS and confront the tenant with certified mail, the better. It's frustrating how these tenants think they can just hand us fake documents and we'll be too confused to take action. But threads like this show that landlords are getting smarter about recognizing these scams and fighting back. Stay strong and protect your business!