I just received a CP2000 notice of unreported income from the IRS. In 2017 I did some cryptocurrency trading. I claimed my gains as about $1000(Which I believe is roughly correct) and coinbase sent in a 1099 saying I have a taxable income of $67,000.
Late into 2017 I got a new employer for the business I worked for. I claimed one of my 1099s for about $35,000 and somehow missed the second 1099 which ended up being about $14,000. I was shocked to see that somehow I made that mistake since that would be incredibly stupid to not report an income literally sent to the IRS... I would be more than willing to fix this if im at fault.
Anyway I think the big thing here is the crypto.
My taxable income went from $14,000$ to $92,000
I have a substantial tax understatement penalty for $5300
interest rate for it being in 2017 for $2300
And a past tax owed of $27,000
For a grand total of $34,600!!!!!! Due by august 7th!!!!!!!!!!
I have purchased TurboTax Audit defense every year but I am not sure if they will actually help or just point me in the right direction. I have contacted them though.
Needless to say, maybe I should never do my taxes again. Maybe I am a moron for ever getting into crypto or maybe just a moron in general. I know very few people actually put it on their taxes like I did (Just trying to pay tax like a good boy haha) and I am terrified for what this means for my family and I. I am in the process of getting a decent job right now and for the moment cant even afford rent. Please if anyone has advice I would really appreciate it.
I can give more info on my crypto trading from that year if needed. I am guessing each time I traded they counted it as a taxable event. I did not realize nor did I ever see any information like that in 2017.
What do I do? I dont even have $34600 to give them and I only made $1000 from crypto!
