They're saying (The IRS), that based on the average salary that professionals of that type (Real estate professionals) make per year that the assessment they are interested in receiving is around $3,000, but no transactions were done whatsoever, the real estate license was obtained but no business was done.
They sent a proposed assessment, which they said was not a bill and that I could give an explanation if I did not have a filing requirement etc....and once I filled it out completed with the explanation, attached to their forms on a separate sheet, they responded by sending a bill? How can I prove that I did no transactions, what documents do I need to show this? On the correspondence received a few days ago, they didn't even provide enough time for me to do a tax return to show that I did not have an income as a real estate professional? What is with this?
2007-07-20 09:52:34 · 3 answers · asked by :::♥:::Castle:::♥::: 1 in Business & Finance ➔ Renting & Real Estate
Being that you have an occupational license, you still have to file an "informational return." The reason for this is that if you don't, the IRS and the state will "estimate" that you made x-amount of dollars and didn't report, hitting you with penalties and interest and collection fees. This situation can be a total pain to resolve. I went through the same thing with the State of California for a period I was on total temporary disability. I had a California Horse Racing Board license, so they "assumed" I made money with this license. It took two years, garnished wages over taxes I didn't owe on money I didn't earn, a court hearing, and another year to get my money refunded and it off my credit.
File the return for information purposes..you will thank me later.
2007-07-20 10:05:04 · answer #1 · answered by Anonymous · 0⤊ 0⤋
File a return showing no income.
If you did NOT get a 1099 from any brokerage company, you in fact owe no tax.
Make sure you sign the return or the I.R.S. will think your being cute and send it back to you to sign.
Hope this helps!
Terry S.
2007-07-20 18:55:11 · answer #2 · answered by Terry S 5 · 0⤊ 0⤋
File a return showing no taxes due.
Since the IRS has received no 1099's, from any employer, it will take care of itself.
2007-07-20 17:02:48 · answer #3 · answered by ed 7 · 0⤊ 0⤋