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Sarah, a single mom of twins who is a hairdresser, regularly paid her taxes every year when suddenly, she received a tax notice that she owed an additional $20,000. She didn’t know what was going on because nothing about this situation made sense. After contacting the IRS, she was told that she was being taxed on a second 1099-K due to earnings from her second account on a point-of-sale app.
Now, as a hairdresser who rents a booth at a local salon, Sarah does accept payments through this point-of-sale app. The IRS continued to tell her that she owed money due to the second account, even though this app only allows one account for one person. After many calls and much digging, it was determined that her former partner (and father of her twins) had changed his company’s app account and associated it with Sarah’s account through her social security number after they separated. Unbeknownst to her, she was expected to pay the taxes on his earnings without knowing how or when he did this.
Once figuring out what happened, it was a matter for the Advocacy Center’s tax clinic to get it resolved. We filed past earnings records, bank statements, tax forms, etc., along with getting a signed affidavit from her former partner. After over a year, we were able to prove to the court that the earnings were actually not Sarah’s and that she did not owe the additional $20,000 in taxes.
“It took a lot of pressure off of me and gave me peace of mind. While I knew it would be corrected in the end, I appreciated Soreé Finley (Advocacy Center Program Director) for her availability, her assurance and her responsiveness. Life is much better now.”
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