Form 1099-K is a new information return sent to businesses by “payment settlement entities” reporting the amount of credit card and other electronic receipts that were processed for the business. The IRS also receives a copy of Form 1099-K and cross checks the reported amounts with the business’s total income reported on its tax return. Where the numbers don’t seem to make sense, the IRS sends notices to businesses telling them they “may have underreported gross receipts.” Notices go on to say “This is based on your tax return and Form(s) 1099-K, Payment/Merchant Cards and Third Party Network Transactions that show an unusually high portion of receipts from card payments.”
The IRS has sent thousands of letters labeled “Notification of Possible Income Underreporting” to small business owners. The notification project is ongoing as part of the IRS’s campaign to deal with the “tax gap,” the difference between taxes owed and taxes actually collected.
If you receive a notice, contact us immediately so that we can determine what response is required.
For help with IRS, tax audits, tax problems, back taxes, tax settlements, tax debt, Offer in Compromise, tax help, IRS debt, a tax lien, a state tax levy, an IRS levy, an IRS tax lien, contact us. If you need IRS help and have unresolved cases with previous tax lawyers and tax attorneys, we can help find an optimal resolution for your indigenous needs. Contact us at 201-947-8081 or 646-688-2807, or email us at info@irstaxproblems.com
