Hello,
I am desperate for help and would appreciate any insight the community can provide.
In 2019 I engaged in far more online gambling and sports betting than I should. It has taken time, but I have thankfully been able to put this chapter of my life behind me. The bigger issue is that I made all of my Deposits and Withdrawals via PayPal. PayPal no longer reports withdrawals as "Sales of Goods or Services" but did in 2019 and 2020.
In 2019 I had significant losses and did not initially know I needed to file these since they were gambling losses. PayPal never sent me a 1099-K either. In 2021 I got a message from the IRS saying I had underreported $211k of income from PayPal. This was my total withdrawal amount. The issue is that I made $250k in deposits, so I had a net loss of $39k.
I have refiled with my H&R Block pro multiple times. We have added $211k in gambling "wins" and $211k in corresponding gambling losses. We have provided a detailed breakdown by website, a list of all the transactions and even a monthly breakdown. Not sure why monthly is needed, but when I visited my local IRS branch this is something they asked for.
It keeps getting rejected. I am not sure what additional information I can provide. The thing is that in 2020 I had a much smaller amount, got the request to refile from the IRS and they accepted my refiling.
I think they are just so hung up because this is a huge amount of money that they think they are entitled to. I don't know what else to do? Should I try to get DraftKings to sign a sworn affidavit saying they did not buy anything from me? I say that in jest, but at this point I really don't know what to do. I would appreciate anyone who can help.
Thanks,
Bobcobb301
