4 ms·

Careful with tax implications!

by pixelbeat__ 4y ago

WastingMyTime89 4y ago
There is no tax implication of being incorrectly wired money. This money is not his.
- bastawhiz 4y ago
  That's a very optimistic view of how the government would interpret this.
- deleted 4y ago
  [deleted]
- bombcar 4y ago
  If they do not claw it back before tax time what do you do? Claim it as income and pay tax and then refile your return later? Ignore it and hope the bank didn’t report it? What if Google then also 1099s you?
  - 323 4y ago
    You just leave it aside until you figure out it's status. Since it's pretty likely the money will be returned, I don't think this is a controversial take.
  - sbaiddn 4y ago
    Ya its a bloody nightmare made worse by Google's wall of impenetrability.
  - andsoitis 4y ago
    You ask your accountant what to do.
    - datavirtue 4y ago
      Careful, my grandmother almost got scammed by a lawyer she knew and had done business with for decades. She is an accountant. He was leveraging her trust in him to get her to sign a power of attorney granting him control of her finances and estate after her death (intermixed in a bunch of estate planning docs). She was about 80 at the time but was still able to catch it. Don't trust anyone.
      - deleted 4y ago
        [deleted]
      - jtbayly 4y ago
        That’s reason enough to disbar a lawyer. I hope she reported him.
        mindslight 4y ago
        Unfortunately, the situation sounds right in line with a rich individual engaging a trusted attorney up to be their neutral PoA/executor/trustee (as opposed to one of their heirs). So the attorney would likely make the case that they thought this is what the client wanted. The potential to go south only occurs after death/incapacitation where the attorney can drag out the estate/trust because they're taking administration fees. Please go ahead and report it. I just don't think the interpretation will be so clear cut.
  - nwellinghoff 4y ago
    Maybe just wait until next October and contact the IRS and see what 1099s have been filed using your name.
    - mindslight 4y ago
      My amateur analysis - If OP really has no idea why the payment was sent and does not feel entitled to it, I'd judge it as not being income in the current year. While OP is in possession of it (per "cash basis"), it's only by clerical error. They're not free to do with the money as they'd like (eg spend it), and thus they're in the position of a trustee rather than someone who has received personal income. Remember, not every payment coming into your bank account is a taxable event. If OP receives a 1099 for it, or they file their taxes and then receive a notice that the IRS has a 1099, then they declare it as income (since the 1099 indicates the payment had intent), distribute the money to themselves by moving it to a different account where it can't be ACH reversed, and consider the matter settled. Failing that, if some time down the line Google confirms it as a legitimate payment or the clock runs out, then you distribute it to yourself and declare it as income at the time of distribution, regardless of the missing 1099. Alternatively, if Google demands/pulls the payment back and you haven't paid taxes on it, case closed. If Google does somehow issue a 1099 and then later ends up demanding the money back, then I'd say OP has a strong case that at the very least Google owes them for all the resulting damage of having to refile their taxes, etc. And given that OP is in possession of the money and outside the ACH reversal window, Google would have to mount a legal offense to get it back where OP could argue this point.
  - s1artibartfast 4y ago
    what exactly do yo think the bank would be reporting to the IRS?
  - WastingMyTime89 4y ago
    You don’t claim as income something which is not income. There is no question here. It doesn’t matter if the bank report it. This is not his money. Google won’t 1099 you for money they shouldn’t have wired you. I mean technically if they fill a 1099 for this, the money is yours. Congratulations, you are now 250,000$ richer and owe back taxes to the IRS.
  - htrp 4y ago
    if google 1099s you thats an admission that they do in fact owe you money
- sbaiddn 4y ago
  But there are tax implications come April when the taxman wants a cut and Google might only get around to demand its money back a few years from now. Sure you can refile your taxes then, but that will suck
  - zarzavat 4y ago
    The taxman can’t take a cut of property that isn’t yours. Imagine you own land that has a parking lot on it. Someone parks their $250k lambo on your land and leaves it there for a few months. You don’t get taxed on that. You certainly don’t report owning a new $250k lambo, and then later amend your tax return when the owner comes back, that would be a false report.
    - naavis 4y ago
      But if someone stuffs money in an envelope and slips it under your door, the taxman could very well argue that it is yours and want their cut.
      - rocket_surgeron 4y ago
        It has been my experience that the IRS is extremely accommodating and will work with anyone who is honest and direct about their issues. The conversation would probably go like this: Dude: "Hey taxman Google sent me money but it's not mine" IRS: "Ok don't spend it or it becomes income, if it turns out it was yours file an amended return. Contact us and reference this conversation and any penalties will be waived." The IRS is not extremely accommodating and will not work with someone who is dishonest or evasive about their issues.
        RHSeeger 4y ago
        That all being said, you can run into the same issue you can run into with _any_ official; if you happen to encounter one of the bad eggs, your entire life can be turned upside down. You get the person as the IRS that decides you were supposed to pay taxes on it and now you owe penalties, and then you can't get anyone to overturn that. Then Google comes and wants its money back, but the IRS has already said you owe taxes and penalties, and bad egg has decided you contradicted him once, you you can go suck an egg. Yes, in most cases, government agencies will work with you and behave rationally. But one time in <some large number>, things go a different direction. And the people with the power can turn your life into a nightmare without batting an eyelash. I would get a lawyer, someone that knows how to best protect you from the system.
- postalrat 4y ago
  There should be an adverse possession for money put in your account that you pay taxes on.

Careful with tax implications!

WastingMyTime89 4y ago

There is no tax implication of being incorrectly wired money. This money is not his.

bastawhiz 4y ago
That's a very optimistic view of how the government would interpret this.
deleted 4y ago
[deleted]
bombcar 4y ago
If they do not claw it back before tax time what do you do? Claim it as income and pay tax and then refile your return later? Ignore it and hope the bank didn’t report it? What if Google then also 1099s you?
- 323 4y ago
  You just leave it aside until you figure out it's status. Since it's pretty likely the money will be returned, I don't think this is a controversial take.
- sbaiddn 4y ago
  Ya its a bloody nightmare made worse by Google's wall of impenetrability.
- andsoitis 4y ago
  You ask your accountant what to do.
  - datavirtue 4y ago
    Careful, my grandmother almost got scammed by a lawyer she knew and had done business with for decades. She is an accountant. He was leveraging her trust in him to get her to sign a power of attorney granting him control of her finances and estate after her death (intermixed in a bunch of estate planning docs). She was about 80 at the time but was still able to catch it. Don't trust anyone.
    - deleted 4y ago
      [deleted]
    - jtbayly 4y ago
      That’s reason enough to disbar a lawyer. I hope she reported him.
      - mindslight 4y ago
        Unfortunately, the situation sounds right in line with a rich individual engaging a trusted attorney up to be their neutral PoA/executor/trustee (as opposed to one of their heirs). So the attorney would likely make the case that they thought this is what the client wanted. The potential to go south only occurs after death/incapacitation where the attorney can drag out the estate/trust because they're taking administration fees. Please go ahead and report it. I just don't think the interpretation will be so clear cut.
- nwellinghoff 4y ago
  Maybe just wait until next October and contact the IRS and see what 1099s have been filed using your name.
  - mindslight 4y ago
    My amateur analysis - If OP really has no idea why the payment was sent and does not feel entitled to it, I'd judge it as not being income in the current year. While OP is in possession of it (per "cash basis"), it's only by clerical error. They're not free to do with the money as they'd like (eg spend it), and thus they're in the position of a trustee rather than someone who has received personal income. Remember, not every payment coming into your bank account is a taxable event. If OP receives a 1099 for it, or they file their taxes and then receive a notice that the IRS has a 1099, then they declare it as income (since the 1099 indicates the payment had intent), distribute the money to themselves by moving it to a different account where it can't be ACH reversed, and consider the matter settled. Failing that, if some time down the line Google confirms it as a legitimate payment or the clock runs out, then you distribute it to yourself and declare it as income at the time of distribution, regardless of the missing 1099. Alternatively, if Google demands/pulls the payment back and you haven't paid taxes on it, case closed. If Google does somehow issue a 1099 and then later ends up demanding the money back, then I'd say OP has a strong case that at the very least Google owes them for all the resulting damage of having to refile their taxes, etc. And given that OP is in possession of the money and outside the ACH reversal window, Google would have to mount a legal offense to get it back where OP could argue this point.
- s1artibartfast 4y ago
  what exactly do yo think the bank would be reporting to the IRS?
- WastingMyTime89 4y ago
  You don’t claim as income something which is not income. There is no question here. It doesn’t matter if the bank report it. This is not his money. Google won’t 1099 you for money they shouldn’t have wired you. I mean technically if they fill a 1099 for this, the money is yours. Congratulations, you are now 250,000$ richer and owe back taxes to the IRS.
- htrp 4y ago
  if google 1099s you thats an admission that they do in fact owe you money
sbaiddn 4y ago
But there are tax implications come April when the taxman wants a cut and Google might only get around to demand its money back a few years from now. Sure you can refile your taxes then, but that will suck
- zarzavat 4y ago
  The taxman can’t take a cut of property that isn’t yours. Imagine you own land that has a parking lot on it. Someone parks their $250k lambo on your land and leaves it there for a few months. You don’t get taxed on that. You certainly don’t report owning a new $250k lambo, and then later amend your tax return when the owner comes back, that would be a false report.
  - naavis 4y ago
    But if someone stuffs money in an envelope and slips it under your door, the taxman could very well argue that it is yours and want their cut.
    - rocket_surgeron 4y ago
      It has been my experience that the IRS is extremely accommodating and will work with anyone who is honest and direct about their issues. The conversation would probably go like this: Dude: "Hey taxman Google sent me money but it's not mine" IRS: "Ok don't spend it or it becomes income, if it turns out it was yours file an amended return. Contact us and reference this conversation and any penalties will be waived." The IRS is not extremely accommodating and will not work with someone who is dishonest or evasive about their issues.
      - RHSeeger 4y ago
        That all being said, you can run into the same issue you can run into with _any_ official; if you happen to encounter one of the bad eggs, your entire life can be turned upside down. You get the person as the IRS that decides you were supposed to pay taxes on it and now you owe penalties, and then you can't get anyone to overturn that. Then Google comes and wants its money back, but the IRS has already said you owe taxes and penalties, and bad egg has decided you contradicted him once, you you can go suck an egg. Yes, in most cases, government agencies will work with you and behave rationally. But one time in <some large number>, things go a different direction. And the people with the power can turn your life into a nightmare without batting an eyelash. I would get a lawyer, someone that knows how to best protect you from the system.
postalrat 4y ago
There should be an adverse possession for money put in your account that you pay taxes on.