Originally Posted by
roadcrankr
Maybe you missed my earlier post where I identified myself as a CPA.
The advice from your lawyer friends would only pertain to somebody already filing a Schedule C, like for a sole proprietor-type business.
At least, if that person files revenue in excess all 1099's given to him.
But somebody who gets their $3,000 1099-K from eBay, who fails to file a Schedule C will typically get a bill from the IRS.
That bill will treat the entire revenue as taxable. There's no simple explanation to make it go away. The IRS will require an amended 1040.
A Schedule C takes minutes to complete and, most times, you can bring the profit to nil.
I am not referring to tax audits, which are super rare. Just the normal triggering caused by a 1099.
and to note, no humans are involved it is all computer based (ie. ebay electronically sends 1099, which get compared to same year return, mismatch means computer calculates and sends a letter
and heaven help trying to get in touch with a human being at the IRS with their current staffing levels.
no I am not a cpa, but I spend more hours than I care to think about trying to fix an issue (yes I made an error in filing, corrected per IRS instruction and after a year hanging on the phone still did resolve it in the way I hoped to)