|
Posted by webmaster on August 4, 2007, 4:57 pm
Please log in for more thread options
Recently the IRS notified me that they changed my 2005
return. They took my gambling winnings of $60,000, which I
had indicated on line 21 (Other Income), and decided to call
this self employment income. The result is a new tax bill
of $8,000.
IRS specifically states in their tax guide that gambling
income is to be stated on line 21. Thus, how can they now
justify calling this self employment income when I did
exactly as they reference in their tax filing instructions?
Moderator:
File an amended return with the 60K on Schedule C and
deduct your expenses related to earning this income. The
IRS may reclassify this back to line 21.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Phil Marti on August 5, 2007, 4:16 pm
Please log in for more thread options
> Recently the IRS notified me that they changed my 2005
> return. They took my gambling winnings of $60,000, which I
> had indicated on line 21 (Other Income), and decided to call
> this self employment income. The result is a new tax bill
> of $8,000.
>
> IRS specifically states in their tax guide that gambling
> income is to be stated on line 21. Thus, how can they now
> justify calling this self employment income when I did
> exactly as they reference in their tax filing instructions?
Call the number on the notice. The first step is to find
out why they did this, and they're the only ones who can
tell you.
--
Phil Marti
Clarksburg, MD
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Mark Bole on August 6, 2007, 10:33 pm
Please log in for more thread options Phil Marti wrote:
>> Recently the IRS notified me that they changed my 2005
>> return. They took my gambling winnings of $60,000, which I
>> had indicated on line 21 (Other Income), and decided to call
>> this self employment income. The result is a new tax bill
>> of $8,000.
>>
>> IRS specifically states in their tax guide that gambling
>> income is to be stated on line 21. Thus, how can they now
>> justify calling this self employment income when I did
>> exactly as they reference in their tax filing instructions?
> Call the number on the notice. The first step is to find
> out why they did this, and they're the only ones who can
> tell you.
Especially if you simply listed a dollar amount on line 21
and nothing else. The instructions say to list the "type"
as well as the amount, so in your case you should have
written "Gambling winnings" on the dotted line next to the
dollar amount on line 21. If you didn't do this, or attach
a statement, that might be the problem right there.
Did you receive a W-2G for your winnings showing withholding
(common for larger amounts)? If so that also should have
been attached to your return.
If you received a CP2000 letter, this is not actually a
change to your return, but a proposed change (a CP2000
letter is considered a correspondence audit). A written
response documenting the nature of the income should be
sufficient. Just read the letter carefully and follow the
instructions.
As previously posted by the OP and others, this does not
appear to be self-employment income by any stretch.
-Mark Bole
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Taxmanhog on August 11, 2007, 2:19 am
Please log in for more thread options >>> Recently the IRS notified me that they changed my 2005
>>> return. They took my gambling winnings of $60,000, which I
>>> had indicated on line 21 (Other Income), and decided to call
>>> this self employment income. The result is a new tax bill
>>> of $8,000.
>>>
>>> IRS specifically states in their tax guide that gambling
>>> income is to be stated on line 21. Thus, how can they now
>>> justify calling this self employment income when I did
>>> exactly as they reference in their tax filing instructions?
>> Call the number on the notice. The first step is to find
>> out why they did this, and they're the only ones who can
>> tell you.
> Especially if you simply listed a dollar amount on line 21
> and nothing else. The instructions say to list the "type"
> as well as the amount, so in your case you should have
> written "Gambling winnings" on the dotted line next to the
> dollar amount on line 21. If you didn't do this, or attach
> a statement, that might be the problem right there.
>
> ...........
> As previously posted by the OP and others, this does not
> appear to be self-employment income by any stretch.
What TAX year are is the OP dealing in this situation?
TY2006 is not IN CYCLE for CP 2000 processing yet,
BUT special programs & EXAM might be looking at this!
TY2005 CP2000 season began this Spring/Summer.
TY2004 is winding down to a trickle with ASED approaching
4/15/2008
I would recommend contesting the proposal,
with a clear explanation of what is on line 21,
Copy of W2g would help, I hope the payer did not use a
1099-Misc, as that might have triggered a CP2000 situation
I think this might be an instance of a CODE& EDIT error,
the editor may have incorrectly placed special potential
skipped SE tax indicator on the return, possibly if the
notations on line 21 were -NOT- clear enough...
as mentioned by other responders.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Harlan Lunsford on August 5, 2007, 4:16 pm
Please log in for more thread options webmaster@onfirebikinis.com wrote:
> Recently the IRS notified me that they changed my 2005
> return. They took my gambling winnings of $60,000, which I
> had indicated on line 21 (Other Income), and decided to call
> this self employment income. The result is a new tax bill
> of $8,000.
>
> IRS specifically states in their tax guide that gambling
> income is to be stated on line 21. Thus, how can they now
> justify calling this self employment income when I did
> exactly as they reference in their tax filing instructions?
>
> Moderator:
> File an amended return with the 60K on Schedule C and
> deduct your expenses related to earning this income. The
> IRS may reclassify this back to line 21.
Must disagree with this advice. It would only reduce an
amount already in error.
OP didn't say just how he was "notified", but normally this
is either an audit or a CP 2000 letter, in which case
perhaps a visit to a local tax pro, either an EA or a CPA
will help get rid of that 8,000$, an amount not to be
sneezed at.
ChEAr$,
Harlan Lunsford, EA n LA
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
| Similar Threads | Posted | | Re: Self Employment Income of Gambling Winnings | August 6, 2007, 10:33 pm |
| Re: Self Employment Income of Gambling Winnings | August 6, 2007, 10:33 pm |
| Re: Self Employment Income of Gambling Winnings | August 7, 2007, 11:26 pm |
| Re: Self Employment Income of Gambling Winnings | August 7, 2007, 11:27 pm |
| Re: Self Employment Income of Gambling Winnings | August 8, 2007, 7:08 pm |
| Do Large Sports Gambling winnings need to be reported to US Treas Dept? | June 9, 2006, 8:56 am |
| self employment income? | March 8, 2008, 11:15 am |
| Self employment tax on interest income?? | March 27, 2008, 11:16 pm |
| self employment income reporting error ... help please! | June 17, 2006, 9:05 pm |
| Guaranteed Payments and Self Employment Income | September 6, 2008, 6:35 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap