Tax on a hobby

What is the name of your state? Ohio

For two years (2001/2002) my husband had a website from which he was selling electronic and computer goods, as a hobby. He was told by an IRS official that he need not declare any income on this, as it was a hobby, which he could pursue for three years. I have recently found out that this might not be true, and need to find out if we have to amend last years' tax return to incorporate this income (he made approximately $120,000 over the two years, but most of that went back into buying supplies, etc.) and include it on this years' tax return. Any (correct) advice would be gratefully received!

[abezon]

$120,000 of sales is probably not a hobby. Amend & file a Sch.C for the past years. It's better to document all income & expenses. It's also much better to be running this as a business rather than a hobby. Business expenses are deducted on Sch.C. Hobby expenses are deducted on Sch.A as a miscellaneous dedcution.