Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Rented out my house for the last few months of 2019. Collected $8400 worth of rent. Filed taxes accordingly.
Got a nice letter from the IRS today. Apparently the property management company provided the IRS with an additional 1099 that reported that we collected $84,000(!) of rent for those 4 months.
My wife dug through her email and did in fact find this additional/incorrect 1099 with the $84,000 figure. This came some time after the first/correct 1099.
The property management company is defunct. I've reached out to our old property manager with an old email address, an old cell number, and through FB messenger. No reply as yet.
Very concerned about our ability to get this fixed given that the management company is defunct.
Any suggestions on how to proceed would be greatly appreciated.
Status:
"I didn't do it, nobody saw me"
(set 1 day ago)
Location: Ocala, FL
6,486 posts, read 10,360,322 times
Reputation: 7940
I would reach out to a CPA and you should be able to provide bank records proving your actual income. Not much more can be suggested. CPA should be able to help you correct the record, and if not you might have to consult a tax attorney. Best wishes and please let us know what happens.
Got records for the rent collection, such as bank statements with deposits, etc.?
You're fine as long as you can document it. You may have to have a face to face with an IRS person, but do everything you can to document the receivables and you should be fine.
The executed lease confirming the rent.
Contact info for the tenant
Her email saying "Here's your 1099."
I can print out bank statements confirming deposits.
IRS, according to their website, will also attempt to contact the property manager.
I know I’m not in your shoes but I’ve been through something similar before. The IRS couldn’t have more easy to deal with. I provided a written explanation backed up by my records and the issue was closed with a nice letter from the IRS. While the initial letter and proposed penalties almost gave me a heart attack, the rest was so easy. Hang in there!
The executed lease confirming the rent.
Contact info for the tenant
Her email saying "Here's your 1099."
I can print out bank statements confirming deposits.
IRS, according to their website, will also attempt to contact the property manager.
Definitely not something I would lose any sleep over.
I got a letter from the IRS some years ago about a former employer of 2-3 year prior having reported that I earned about $20k more than they paid me. I called the employer and raised Cain, only to discover they had switched my income with another employee (who was underpaid by a similar amount.) They filed a correction and I wrote out a narrative to the IRS with the reply explaining what happened. Never hear another word.
I realize your situation is somewhat different, but my point is that the IRS isn't as frightening as people would think as long as you're up front with them and explain things to the best of your ability as well as provide whatever supporting documents you have.
We have dealt with the IRS several times on audits. Believe it or not, they are reasonable. If you can provide proof of what you were actually paid you should be fine. I would also find something showing what the going rental rates are in the area. There aren't very many places in the country that command $20K a month in rent (if your rental is in one of them, you might have a problem).
Many years ago we were audited and my husband represented himself. The person from the IRS did not have an much knowledge as he did and they had to call in a supervisor (no, he's not an accountant). The sup understood the error he had made on the taxes and why he made it and we paid the amount owed with no penalty. What I'm saying is - they truly are not looking to ding you if this was a clerical error.
Not to mention... point out to the IRS that it's highly unlikely anyone was paying you $21,000 per month in rent... or even $7000 per month for a full year, unless you were running an assisted-living facility.
Not to mention... point out to the IRS that it's highly unlikely anyone was paying you $21,000 per month in rent... or even $7000 per month for a full year, unless you were running an assisted-living facility.
Depending on the location, that's not true though especially with Air BNBs today. Many homes rent for a few grand a night where I live - a tourist destination.
Rented out my house for the last few months of 2019. Collected $8400 worth of rent. Filed taxes accordingly.
Got a nice letter from the IRS today. Apparently the property management company provided the IRS with an additional 1099 that reported that we collected $84,000(!) of rent for those 4 months.
My wife dug through her email and did in fact find this additional/incorrect 1099 with the $84,000 figure. This came some time after the first/correct 1099.
The property management company is defunct. I've reached out to our old property manager with an old email address, an old cell number, and through FB messenger. No reply as yet.
Very concerned about our ability to get this fixed given that the management company is defunct.
Any suggestions on how to proceed would be greatly appreciated.
Sure
Full flaps
Vx speed
Foam the runway
Oh, gear down. GEAR DOWN, NOW!
Throttles back to 20-30%
Watch the crosswinds.
Touch down, "fly" to the taxi way.
Swing into FBO, for a burrito.
LOL.
Seriously, do you have an accountant? This is who you want when dealing with the IRS.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
