PayPal 1099k

[Teena05052019]

I received a Cp2000 notice in ref to income reported on 1099K from PayPal for 2022. I use PayPal for depositing and withdrawing from online gambling sites.  I immediately requested my PayPal activity for that year and forwarded to the irs explaining that this was not for self employment income as they put in their notice but for gambling. I honestly forgot to list this income with my gambling winnings for which I did receive w2g forms for. So basically my question is can’t I just amend my return and include the amount from my PayPal 1099K under my gambling winning losses???? The PayPal activity clearly shows the name of all the online gambling sites used so that itself should have explained to the IRS that this was not self-employment income. I understand that I failed to list that income, however the Correction of my return is still incorrect in my eyes because they’re listing it as self-employment income.

[Bsch4477]

You have to respond to the letter. Sending an amended return will confuse the situation. 

[Teena05052019]

I did respond to the notice and I’ve also spoken to them on the phone. Sadly, the people they have answering the phones are not knowledgeable in tax laws etc (that is exactly what i was told when i called). So the last person I did speak to said to complete an amended return because you want your tax record/transcripts  to show the correct information filed. I was just wondering if anyone has had the similar situation when getting the 1099 for gambling winnings not reported on W2gs

[Opus 17]

Under normal circumstances, when you get such a letter, my response would be to prepare an amended return reflecting whatever you should have reported (in this case, gambling winnings and losses), and mail the amended return plus a detailed letter of explanation to the office that sent the notice, rather than the address for amended returns.  Given your interactions so far, I would still suggest that course of action.   (Even if your losses exceed your winnings, you may owe tax because losses are a schedule A itemized deduction which is sometimes limited.)

[Teena05052019]

Thank you that sounds pretty much what the last rep recommended!  Thank you for your response