So the IRS sent us a notice for our 2021 taxes, saying we owe a lot of money, and it’s been a mess. We’ve been back and forth with them for a year, sending proof to show that we didn’t make the extra $30k they claim. This income is apparently from Block Inc. (never worked with them), but they reported it using my SSN. Now we’re headed to tax court in March 2025, and we don’t know what else we can do to show that we didn’t earn this money. We have four kids and are just getting by paycheck to paycheck. Any advice from anyone who’s been through this?
Have you gotten a copy of the 1099-NEC or 1099-MISC that Block reported to the IRS? Have you tried reaching out to Block directly for details on this?
Kai said:
Have you gotten a copy of the 1099-NEC or 1099-MISC that Block reported to the IRS? Have you tried reaching out to Block directly for details on this?
We never got a copy of the form. I’ve called Block several times, but they just tell me they’ll look into it and never get back to me. Trying again today.
@Noor
You should log into your IRS account online and check your records for 2021. They should have the info there.
Kai said:
@Noor
You should log into your IRS account online and check your records for 2021. They should have the info there.
We checked but didn’t find anything. We just looked again and still nothing.
Kai said:
@Noor
Did you follow the link I sent? You need to pull all the info they have for 2021.
I was looking in the wrong place! Found it now. Over $40k was reported from Block Inc. There are four accounts tied to my SSN with monthly earnings from $500 to $3300.
@Noor
What type of form was it? Was it a 1099-INT, DIV, or B? Does the form have a portion of your name and SSN? Any chance your husband’s been doing some crypto trading or stock stuff on the side and didn’t tell you?
Noor said:
@Jules
It was a 1099-K, and it’s under my social. No way my husband did that.
A 1099-K usually means money came in through things like Cash App or Square. People use these apps for selling things online or receiving payments. If you aren’t running a business and using these apps, it sounds like someone else might be using your identity. You should pull your credit report from all three bureaus to check if there’s anything else out there under your name. You can also freeze your credit to prevent more accounts from being opened.
Noor said:
@Jules
It was a 1099-K, and it’s under my social. No way my husband did that.
Do you or your husband resell tickets or anything like that?
Tully said:
@Noor
Check your Wage & Income Transcript. The report should show up there.
Yes, I found it there. Thanks!
Tully said:
@Noor
Check your Wage & Income Transcript. The report should show up there.
Yes, I found it there. Thanks!
Now that you know what the IRS has been seeing all along, if you don’t recognize the income, write to the IRS and file a form for identity theft. Also, you can ask them to pause the collection process while you sort this out. If it turns out the income is real, you could look into setting up an installment plan to pay it off or even ask for some penalty relief.
Did you or your spouse trade stocks or crypto using Cash App? That could explain why Block and the income are showing up, especially if the basis wasn’t reported. Or did you set up a Square or Cash App account for any reason, maybe for a side business or a community project?
@Whit
Nope, none of that. I found the income listed, but I didn’t make any of that money or have any connection to Block Inc.
Just a heads up, the notice of deficiency isn’t a court summons. It’s an opportunity for you to go to tax court if you choose. Did you ever reach out to the IRS when you first got the CP2000 letter? That’s when you could’ve started the identity theft process. Have you filed any identity theft reports with the IRS?
@Clarke
Thanks for the info! We’ve already reached out to get some professional help. Appreciate the guidance.
Noor said:
@Clarke
Thanks for the info! We’ve already reached out to get some professional help. Appreciate the guidance.
Could it be that you signed up for a business account instead of a personal one by accident? If that happened, the funds might be treated differently. You might want to check how you set it up.
Something similar happened to me once. The IRS thought I made $40k more than I did, and I got a $16k tax bill. It was such a mess! I got my transcripts but couldn’t figure out what they were talking about. I eventually got on the phone with someone, and they went through my transcripts line by line. They insisted I worked at a job 1,000 miles away while doing my current job. Long story short, I had to send them my transcripts to prove I didn’t work there. Turns out someone else was reporting wages under my SSN. After some back and forth and involving the taxpayer advocate, they fixed it. I’ll also note that the IRS’s systems are super outdated.