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

[theshowandme]

Originally Posted by bobbyw8469

I do my own. Turbo Tax. The CPA was too expensive.

This is making me laugh

Just hire the CPA to avoid these headaches

[calvindog]

Originally Posted by theshowandme

This is making me laugh

Just hire the CPA to avoid these headaches

Yeah, I have to agree. Coming to Net 54 for advice on an IRS audit isn't the first step I'd take.

[Republicaninmass]

Originally Posted by calvindog

Yeah, I have to agree. Coming to Net 54 for advice on an IRS audit isn't the first step I'd take.

What about Legal advice?

[Jewish-collector]

Where are you, Bob ? We need you, you old geezer. We have someone needing your advice

[calvindog]

I was audited for baseball card sales many years ago -- about 100K worth, maybe around 2007. It was torture getting together the records as it was a lot of cards. My CPA dealt with those IRS savages and I ended up getting out of it pretty much completely. While I did all the legwork for my accountant, he handled the agent well. Money well-spent.

[bobbyw8469]

Dang Jeffrey. That sounds like a nightmare.

[theshowandme]

Just looked, I paid $196 for a CPA at H&R Block to review my taxes.

My situation is not all that uncommon but I wanted the extra set of eyes.

It helps me sleep better.

1. W2 employee
2. 1099-K from PayPal
3. 1099-K from eBay
4. Brokerage account sales, dividends, interest, etc.

They found a few extra hundred bucks to deduct once I sent it to them for their review.

It was beautiful!

Pay the CPA!

[calvindog]

Originally Posted by bobbyw8469

Dang Jeffrey. That sounds like a nightmare.

It was a nightmare doing the work of finding every purchase and sale. But the agent was utterly ignorant of baseball cards and how they are bought and sold. That ignorance helped me plenty.

[bnorth]

Originally Posted by theshowandme

This is making me laugh

Just hire the CPA to avoid these headaches

^^This X100^^ If you are going to play you need to pay a CPA. Seriously it is worth it every time because of things like this. From personal experience being audited sucks but if you use a CPA it is easy. They take care of everything for you. At least that was my experience and I was audited by everyone that can audit a business. There are way more people that can audit you than you think. It is not just the IRS.

[raulus]

Welcome to the wild and wacky world of IRS examinations.

I am a CPA, and I've been through this a few times with some of my clients. My experience is that as long as you're not hiding stuff, you'll be okay. From what you've suggested above, it sounds like you haven't been hiding stuff. On the other hand, if you have been hiding stuff, then the whole process is going to get painful and ultimately very expensive.

As others have mentioned, your gain on sale for any given item is calculated as the sales price, less your selling costs (including eBay fees), less your cost to buy the asset (also known as your basis). Hopefully you filed the correct forms on your tax return to report your sales. And hopefully when you add up all of the sales reported on your tax return, it sums to the amount that eBay reflected on the forms 1099 that they filed with our friends at the IRS. If not, then the agent will probably start poking at those differences, trying to figure out why there's a difference, and whether that means that you have additional gains that need to be reported.

Part of the fun here will also revolve around whether you are a dealer, a collector, or an investor. Depending on which group you land in, your ability to deduct losses may be limited. And your tax rate will also be impacted.

I agree with the general sentiments here that if you're not a savvy tax professional, then now is the time to hire one. My guess is that without help, this audit will chew up an incredible amount of your time and introduce a lot of stress. In case you were thinking it, you probably don't want to hire me, as I'm far too expensive for this type of work, and generally don't do a lot of work with individuals.

Good luck, and hopefully it's a walk in the park. With any luck, at the National you'll be able to regale us with tales of how you beat the G-men at their own game.

[rjackson44]

my friend went thru this he did like 20 k in sales,,after it was said and done it was not good ,,a nightmare.not worth it.had to make huge payment plans.

[bobbyw8469]

Originally Posted by rjackson44

my friend went thru this he did like 20 k in sales,,after it was said and done it was not good ,,a nightmare.not worth it.had to make huge payment plans.

I am fearful of this as well. I didn't cheat the IRS....I deducted what I paid for cards to offset the sells. But I'll admit....my record keeping skills suck. Hopefully this won't make me wish I never messed around in the hobby.

[SyrNy1960]

Originally Posted by theshowandme

This is making me laugh

Just hire the CPA to avoid these headaches

CPA is well worth the money.