social security and irs

[yev497]

What is the name of your state (only U.S. law)? CA
My parents live in the house owned by me and my brother. Their benefits were cut off by third this spring, since it is only 3 people live in the house ( my parents and my brother). So on the appeal to the Social Security we wrote that we are renting a room to our parents. On one of the papers for Social Security I have made a mistake, thinking the question was how long they leave on the property - I put since 01/01/2000. But the question was how long they rent ( I don't know how did I miss it). Social Security sent that paper to IRS. Now I have 14 years of unpaid taxes and under IRS investigation. Although we never rent and decided to rent just this year to make up parents lost income. What should I do now?

 

[FlyingRon]

What a tangled web we weave when first you try to deceive. You lied and said you were receiving rent, and hence they were right to assume you did receive the money and that you should be depreciating the property. You should get yourself to a tax professional and perhaps an attorney to figure out whether paying the tax or admitting to social security fraud is a better solution for you.

 

[yev497]

What a tangled web we weave when first you try to deceive. You lied and said you were receiving rent, and hence they were right to assume you did receive the money and that you should be depreciating the property. You should get yourself to a tax professional and perhaps an attorney to figure out whether paying the tax or admitting to social security fraud is a better solution for you.

I don't understand how this is a fraud?

 

[davew128]

I don't understand how this is a fraud?

So what happened when you tried to explain that you answered the question incorrectly?

 

[yev497]

So what happened when you tried to explain that you answered the question incorrectly?

I did not have chance to explain that, since I don't have any papers from either Social Security nor IRS. I just know that I m under IRS investigation and at first I could not understand why, until it finally came to me, what I ve done. This is why I m not sure what to do. Either wait until papers will come and or call them ( don't know who now - Social Security or IRS?) and try to explain what happened.

 

[FlyingRon]

I don't understand how this is a fraud?

You told the Social Security people that she was paying rent so that she would qualify for needs-based benefits and that was a LIE.

 

[davew128]

I did not have chance to explain that, since I don't have any papers from either Social Security nor IRS. I just know that I m under IRS investigation and at first I could not understand why, until it finally came to me, what I ve done. This is why I m not sure what to do. Either wait until papers will come and or call them ( don't know who now - Social Security or IRS?) and try to explain what happened.

How do you know you're under IRS investigation for 14 years of unreported rental income?

 

[yev497]

How do you know you're under IRS investigation for 14 years of unreported rental income?

I had a call from them, telling me that I m under IRS investigation. They did not state why. They just acknowledged me that I m under investigation. At first I thought this is a scam. But the problem is I cannot recollect what was the statement on the Social Security paper I signed. For whatever reason I thought the question was how long they live on the property, but now I think that the actual question was how long they rent and this is why IRS is looking into that.

 

[Astrolink]

Wouldn't it be prudent to amend your tax return ASAP to show the correct information?

 

[Zigner]

I had a call from them, telling me that I m under IRS investigation. They did not state why. They just acknowledged me that I m under investigation. At first I thought this is a scam. But the problem is I cannot recollect what was the statement on the Social Security paper I signed. For whatever reason I thought the question was how long they live on the property, but now I think that the actual question was how long they rent and this is why IRS is looking into that.

The IRS doesn't make initial contact by phone. This may very well be a scam.

 

[Zigner]

Wouldn't it be prudent to amend your tax return ASAP to show the correct information?

The returns show the correct information already. That's not where he lied.

 

[LdiJ]

I had a call from them, telling me that I m under IRS investigation. They did not state why. They just acknowledged me that I m under investigation. At first I thought this is a scam. But the problem is I cannot recollect what was the statement on the Social Security paper I signed. For whatever reason I thought the question was how long they live on the property, but now I think that the actual question was how long they rent and this is why IRS is looking into that.

That phone call was absolutely a scam. Its been well publicized in the media. The IRS NEVER makes initial contact with someone about an audit or tax debt without sending them lots of letters in the mail first. If you have received no letters in the mail, you are NOT under investigation.

 

[yev497]

The returns show the correct information already. That's not where he lied.

I m still struggling to understand the terms LIE and FRAUD. I don't understand where did I commit a fraud. Social Security page clearly states that to have full SSI benefit - you have to have either enough people in the household for fare share or to rent. Since I moved out of the house, it is 3 people right now and this why my parents benefits were cut. So, we decided to do the rent. How this is a fraud? How this is different from if they moved out of the house and rent a room or apartment somewhere else? is that considered a fraud too?

 

[FlyingRon]

The fraud is whether you actually collected rent from them or not. If you were actually renting it to them, then you had INCOME and DEPRECIATION that you needed to handle on your taxes. If you weren't actually collecting rent from them, IT WAS FRAUD to claim to Social Security that you were renting. You used your MISREPRESENTATION to the SSA to get benefits that they were NOT entitled to.

Either you have failure to report and be taxed on the rental income OR you have committed fraud in claiming the parents were renting and they were not.

Get your story straight and remedy the situation to match.