@espresso_warehouse wrote:
@ollmarci-xxzlqsa8 wrote:
Oh I understand, but, I fear that forms will be issued for items which are not taxable, once issued, you won’t correct it. Ever try to convince the IRS you don’t owe them what they say you do? After 18 years, I’m done witah ebay
I've been filling out pages of tax schedule forms since I was 18 years old. What is the issue? I don't get it.
IMHO the issue is that the IRS does not appear to have issued any clear guidance about how to account for nontaxable income on a 2022 tax return. And this lack of guidance is unsettling for some taxpayers.
Now before everyone jumps on the "tax cheat" bandwagon, let me give a specific example.
If Harry sells a used mountain bike on eBay for $600 which is substantially less than he paid for it. In other words, it was the equivalent of a yard sale. His selling was not a sustained endeavor, it was not run like a business, and it was not entered into for profit. Under the "Sale of personal items" in IRS publication 525, the IRS says this $600 does not need to be reported.
So if this happened in 2019 Harry would correctly leave that $600 off his tax return because in publication 525 the IRS says it is not reportable, and as a result there is no tax consequence.
And if it happens in 2022 Harry would correctly leave that $600 off his tax return because in publication 525 the IRS says it is not reportable, and as a result there is no tax consequence.
However, for 2022 Harry will receive a 1099-K for the $600 that the IRS says does not need to be report. And history and posts on this board suggest that the IRS will see that 1099-K as unreported income, add it to his return as income, and send him a bill for $600 that the IRS says should not be reported.
So the "issue" is that the IRS has not issued any clear guidance about how a taxpayer should properly account for non-reportable income that appears on a 1099-K so that he does not have to pay taxes on nontaxable income.
Granted, no one has seen the 2022 tax form yet, and no one has seen the 2022 publication 525 yet, so it is possible that the IRS will update that form and that publication and explain what the tax payer should do. And that lack of guidance is causing concern for many taxpayers.
