3 ms·

Ah, cool cool, so when the IRS accuses you of committing tax fraud because you have $12,000 of undeclared "income" due to your roomate venmoing you their half o

Ah, cool cool, so when the IRS accuses you of committing tax fraud because you have $12,000 of undeclared "income" due to your roomate venmoing you their half of the rent, you just have to simply prove to the IRS that you aren't a criminal!

oh_sigh 5y ago
Should be fairly easy to show monthly payments in the value of half rent between your roommate and you.
- heyparkerj 5y ago
  "Fairly easy" is never language I would use to describe showing/proving anything to the IRS
- LorenPechtel 5y ago
  Proving things to the IRS is hard. Let's go back to the stone age--the 1980s. IRS to my mother: You didn't report your income from XXXX on your tax return. Mother to IRS: I've never even heard of XXXX let alone worked for them. I'm retired. IRS to mother: If you believe the 1099 is wrong talk to the company to get them to fix it. Mother to IRS: I have been unable to even locate XXXX, please provide me with contact info. IRS to mother: We are not allowed to give out such information. I was off at college at that point and don't know how the situation was finally resolved. When I got a bad 1099 my former employer even sent out a letter explaining the problem (a bogus entry had made it onto all of our 1099s) and how to dispute it with the IRS but in that case they weren't going to be contesting it--the company had already gone under. I'm pretty sure my mother's case was an illegal with a forged SS card who used my mother's information--the company would contest a dispute over a 1099 because by their records it was correct.
  - throwawayboise 5y ago
    I've never had a problem ultimately resolving errors by the IRS. I'm sure that's not universally true, and it does take forever. Respond immediately if you are notified of an issue. If you are actively working to resolve the issue that will help avoid getting in a situation where wages are garnished or liens issued. Do everything in writing, sent by registered postal mail. Nothing they tell you over the phone is official. Keep copies of everything related to the issue forever.
    - anthonygd 5y ago
      All the things you mention are problems. The stakes are high and the chance of a mistake is as well.
    - LorenPechtel 5y ago
      The problem in my mother's case was that the IRS was legitimately owed money, just not by her. This was before identity theft was a household word.
- neither_color 5y ago
  I believe the objection people have is to ever being put in a situation where you have to explain yourself anyways, even if you're innocent. "Just be polite to policeman, calmly explain the situation and he won't hurt you." The optimal strategy is to avoid interaction/scrutiny whenever possible because every interaction adds a non-zero chance that someone with a quota/chip on their shoulder/bad day is about to ruin you.
secabeen 5y ago
If your roommate is tagging rent as a "goods or service", you're losing 3% to credit card fees on each of those transactions. I doubt many people are doing that. If you use the "friends and family" transaction, then there is no reporting or fee.

oh_sigh 5y ago

Should be fairly easy to show monthly payments in the value of half rent between your roommate and you.

heyparkerj 5y ago
"Fairly easy" is never language I would use to describe showing/proving anything to the IRS
LorenPechtel 5y ago
Proving things to the IRS is hard. Let's go back to the stone age--the 1980s. IRS to my mother: You didn't report your income from XXXX on your tax return. Mother to IRS: I've never even heard of XXXX let alone worked for them. I'm retired. IRS to mother: If you believe the 1099 is wrong talk to the company to get them to fix it. Mother to IRS: I have been unable to even locate XXXX, please provide me with contact info. IRS to mother: We are not allowed to give out such information. I was off at college at that point and don't know how the situation was finally resolved. When I got a bad 1099 my former employer even sent out a letter explaining the problem (a bogus entry had made it onto all of our 1099s) and how to dispute it with the IRS but in that case they weren't going to be contesting it--the company had already gone under. I'm pretty sure my mother's case was an illegal with a forged SS card who used my mother's information--the company would contest a dispute over a 1099 because by their records it was correct.
- throwawayboise 5y ago
  I've never had a problem ultimately resolving errors by the IRS. I'm sure that's not universally true, and it does take forever. Respond immediately if you are notified of an issue. If you are actively working to resolve the issue that will help avoid getting in a situation where wages are garnished or liens issued. Do everything in writing, sent by registered postal mail. Nothing they tell you over the phone is official. Keep copies of everything related to the issue forever.
  - anthonygd 5y ago
    All the things you mention are problems. The stakes are high and the chance of a mistake is as well.
  - LorenPechtel 5y ago
    The problem in my mother's case was that the IRS was legitimately owed money, just not by her. This was before identity theft was a household word.
neither_color 5y ago
I believe the objection people have is to ever being put in a situation where you have to explain yourself anyways, even if you're innocent. "Just be polite to policeman, calmly explain the situation and he won't hurt you." The optimal strategy is to avoid interaction/scrutiny whenever possible because every interaction adds a non-zero chance that someone with a quota/chip on their shoulder/bad day is about to ruin you.

secabeen 5y ago

If your roommate is tagging rent as a "goods or service", you're losing 3% to credit card fees on each of those transactions. I doubt many people are doing that. If you use the "friends and family" transaction, then there is no reporting or fee.