Hi we used this method for my son's return (putting a negative offset for a 1099K he got from Paypal for reimbursements sent to him via P2P transfers - he did a lot of shopping for us and relatives during covid) and my son now just received an IRS CP2000 form saying they did not see the income on his return (along with a missing $13 1099 from a bank we apparently never got but is correct).
I looked at his tax return and I do see the amounts but they show under "Additional information from your 2021 Federal Tax Return" and then "Schedule 1: Additional Income and Adjustments to Income
Other Income Continuation Statement" which has me thinking the IRS did not see this via their automated system.
Other than just sending them a letter explaining the 1099K was not actual income but was reimbursement for expenses should we do anything else (we will tell them the $13 is correct and apologize for missing that)? I found another blog that suggested filing a schedule C instead of reporting as adjustments to income?
Thanks!
