Help!! Audited on my 2021 Taxes over baseball cards!!

[bobbyw8469]

I got audited yesterday over my 2021 taxes for the Ebay sales. Any advice on what to do?

[Leon]

Originally Posted by bobbyw8469

I got audited yesterday over my 2021 taxes for the Ebay sales. Any advice on what to do?

Find your cost basis and subtract it. Then declare the rest as income and pay your taxes.
.

[bobbyw8469]

Originally Posted by Leon

Find your cost basis and subtract it. Then declare the rest as income and pay your taxes.
.

I paid taxes on it back in 2021. I got lucky and still had my receipts from the various auction houses. But Ebay doesn't send invoices for the fees they take out. Trust me Leon....I'm not getting rich. I just love buying and selling cards.

[jimq16415]

Bobby I think you can go to ebay payments and search from 01/01/2001 to 01/01/2022 and it lists each sale. deduction for fees and shipping, then net for each sale. It would be a long project for as much as you sell but it's at least a way to itemize the fees. Fees you can deduct is less taxes for you now. Good Luck!

[Directly]

I think if you look at eBay's monthly reports it shows eBay's Fees and shipping fees + other adjustments-- -

[jimq16415]

Originally Posted by Directly

I think if you look at eBay's monthly reports it shows eBay's Fees and shipping fees + other adjustments-- -

I don't mean to hijack the thread but where do I look to find ebay's monthly reports from 2021? I'm not experienced on ebay and can use the help!

[theshowandme]

Originally Posted by jimq16415

I don't mean to hijack the thread but where do I look to find ebay's monthly reports from 2021? I'm not experienced on ebay and can use the help!

https://www.ebay.com/help/selling/fe...ctions?id=4847

[4815162342]

I believe the highest audited county in the country is in the Mississippi Delta.


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[bobbyw8469]

Have any of your guys ever been audited for selling stuff on Ebay yet?

[raulus]

Originally Posted by bobbyw8469

Have any of your guys ever been audited for selling stuff on Ebay yet?

I have not. But I've also never gotten a 1099 from eBay.

I did have a bonus side quest with the IRS a couple of years ago, when their scanner failed to register a negative sign on my tax return, and they sent me a notice saying that I owed them $73k. But nothing related to cardboard.

[Gorditadogg]

Originally Posted by raulus

I have not. But I've also never gotten a 1099 from eBay.



I did have a bonus side quest with the IRS a couple of years ago, when their scanner failed to register a negative sign on my tax return, and they sent me a notice saying that I owed them $73k. But nothing related to cardboard.

I have an ebay store. I would guess that I would have gotten a 1099 anyway because of the sales threshold, but I don't know for sure how they do things.

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[GeoPoto]

Good point Val. Thinking in Polish. Oh well.

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[bobbyw8469]

Still dealing with this. Dealing with the government is a nightmare. New info coming soon.

[bnorth]

Originally Posted by bobbyw8469

Still dealing with this. Dealing with the government is a nightmare. New info coming soon.

I have been audited by everyone who can and yes it does suck. I was lucky and had a real business and accountants who took care of everything so it wasn't too bad. Can't imagine how messed up your ordeal with the IRS is.

Did you try the hobby approach?

[bobbyw8469]

Originally Posted by bnorth

I have been audited by everyone who can and yes it does suck. I was lucky and had a real business and accountants who took care of everything so it wasn't too bad. Can't imagine how messed up your ordeal with the IRS is.

Did you try the hobby approach?

I paid a tax person and she redid my entire taxes. She took out the deductions of my home office to give the IRS a "win".

[OhioLawyerF5]

Originally Posted by bobbyw8469

I paid a tax person and she redid my entire taxes. She took out the deductions of my home office to give the IRS a "win".

She took out the home office deductions because you yourself said you are a hobbyist, yet filed a schedule C and took deductions only a dealer is allowed to take. People need to hire a CPA BEFORE they file taxes, not after they get audited.

[bnorth]

Originally Posted by bobbyw8469

I paid a tax person and she redid my entire taxes. She took out the deductions of my home office to give the IRS a "win".

Glad you hired a professional. Even when I ran a real tax paying construction business out of my home my accountant wouldn't write off "home office" expenses. He said it always causes problems and the little I might save wouldn't be worth the trouble if audited.

Do you still sell and if so have you decided to became a real business or still trying the "hobby" route. I am interested in the differences if you decided to go the business route.

[e107collector]

Schedule Cs are highly scrutinized and are usually audited the most out of all the returns we have filed out of our firm. Odds are they will get you on something. Very few audits end in a no adjustment.

[e107collector]

I’m an IRS Enrolled Agent, and have worked for a CPA firm for 19 years. The last few audits I worked on, have taken 12-18 months to complete. It’s a long drawn out process. The auditor you are dealing with, is working on numerous audits at the same time.

Plus after COVID, some of the auditors are working remotely from home, with limited resources.

Hopefully you’ll get it resolved soon, and can move on with limited exposure. You can always appeal their findings as well.

All the best, and keep the board posted as it progresses.

Tony