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Frequent Contributor
mmduluth
Posts: 320
Registered: ‎05-17-2011
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Re: AMEX FR after having my Zync for 2 Weeks

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RyVision
Posts: 1,346
Registered: ‎04-15-2011
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Re: AMEX FR after having my Zync for 2 Weeks


joeyh2007 wrote:

If you saw my original post, I got a Zync card and just got the dreaded call from the FR department. To this point in time, I have only spend $900 which I was planning to pay off in 3 days isn't due until the 12th. 

 

I'm really nervous because I'm a freelancer, and as all freelancers, have a unique situation.

 

Most of my clients pay cash which I deposit in a bank for proof of income. Also, I work for about 100 different clients, so the clients that pay over $700/yr send me a 1099.

 

My total income that I have to report to the IRS is $4,000, but my TRUE income is $60,000. 

 

So, will AMEX be able to look at my situation rationally and use my bank statements as proof of income combined with my tax forms. I ask this because I read that they only look at tax records, but I feel that they should look at any money you bring in as money that can be used to pay the card bill.

 

So would anybody pleease give me some constructive tips so I may pass this FR. I start the process tomorrow (monday) morning.

 

Thanks.


 

Joeyh;

 

When you say "have" are  you talking about last years income verses 2012's estimated income (the 60k)?  Or do you mean you made 60K last year but were in a unique situation at that time?  If it's the former, you would have to explain your expected income for 2012 and show reason why 60k is what you're anticipating for income for 2012.  If it was the latter, you can use Turbo Tax (or what you may have used) and try redoing your taxes (including deductions etc) and see if that would clear things up and not force you to pay a fortune into the IRS (that's where  your deductions for EVERYTHING come into play, including mileage etc).  If it looks like you could handle it (the last year filing experiment possibly costing you), you could always file an amended return with the IRS and clear up last years issues (if there are any, we aren't tax experts here in general and there are rare circumstances where income does not need to be reported).   If  you ended up going that route, you could file the amended return (pay if  you have to etc) and then provide AMEX with a copy of the amended return.  If that's your concern you might be able to "kill 2 birds with one stone" as they say. The amended return could be complicated but if you are not sure you don't have to report income for the return you filed this year, you want to double check and if you should have, you're better off filing an amended return (correcting your tax filing) and telling the IRS before the IRS notices or is notified and contacts you with questions. 

 

If it's a case of you estimating your income for 2012 due to increased income generation verses last  years, you have a lesser problem I would think.  AMEX would not be totally shocked that someone was projecting their income for the year if they had something to indicate it was likely.

 

You don't have to tell us on here which (if anything) of the two possiblites I listed you might be dealing with, but I hope I might have helped answer your question to some extent and possibly given you some sort of idea on how to proceed if you need to correct something.

 

Frankly, not that you have done anything wrong, only a reminder to anyone dealing with taxes: It's wiser to take food from a rabid dog than it is to try to keep funds from the IRS.

 

If you possibly did not pay what you should have for this last filing, you might want to ignore AMEX's requests for docs and let them close the account

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AndyK
Posts: 913
Registered: ‎06-09-2011
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Re: AMEX FR after having my Zync for 2 Weeks


RyVision wrote:

 

Frankly, not that you have done anything wrong, only a reminder to anyone dealing with taxes: It's wiser to take food from a rabid dog than it is to try to keep funds from the IRS.

 

If you possibly did not pay what you should have for this last filing, you might want to ignore AMEX's requests for docs and let them close the account



I have to completely agree with this. If you made $60k and only reported $4k as taxable, you owe a lot in back taxes. If the IRS finds out (and they will if you end up getting audited), you'll have to pay a good amount of money back to them, plus penalities/interest, plus potentially end up with tax liens and other issues on your credit report. Not to mention that tax evasion carries some harsh penalities in general.

I absolutely hated having to pay the extra taxes this past year due to being self-employed, but it's not really optional. Many banks (and even rental companies and the likes) are only going to look at your "taxable income"  when it comes to applications, so you really end up shooting yourself in the foot if you underreport your earnings.

Now, if the idea is that you made $60k and after deductions only had to pay taxes on $4k, that makes it a different situation. I have no idea how Amex would look at that. I technically made something like $190k last year, but after paying contractors and getting all the deductions, my actual taxable income was only around $42k - and that's what I used for all my credit and loan applications. If I had used the $190k as income, I'm sure I would have had a hard time explaining the discrepancy if I had to submit tax documents to a creditor.

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CreditCrusader
Posts: 799
Registered: ‎09-27-2011
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Re: AMEX FR after having my Zync for 2 Weeks


joeyh2007 wrote:

I'm really nervous because I'm a freelancer, and as all freelancers, have a unique situation.

 

Most of my clients pay cash which I deposit in a bank for proof of income. Also, I work for about 100 different clients, so the clients that pay over $700/yr send me a 1099.

 

My total income that I have to report to the IRS is $4,000, but my TRUE income is $60,000. 

 


BE CAREFUL...what you are describing here could cause you all sorts of headaches...particularly when the IRS catches wind of it. They could audit years and years of returns and make your life a living h*ll if your income doesn't match what you reported.

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n777ua
Posts: 573
Registered: ‎05-29-2011
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Re: AMEX FR after having my Zync for 2 Weeks

This may be a dumb question; but how would requesting a tax transcript trigger a potential IRS audit ? IE if Amex feels the OP is lying about his income/circumstances won't they just close the account ? I guess I can't see them calling the IRS and saying "hey, check this guy out".  I agree the OP should just close the account, but I"m not sure why I see he/she should be so afraid of an IRS audit ? 

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Crashem
Posts: 3,098
Registered: ‎01-26-2012
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Re: AMEX FR after having my Zync for 2 Weeks

Who knows. Requesting a transcript isn't big deal. But who knows what channels of communication go back and forth. Hence the potential issue for op.
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Established Contributor
CreditCrusader
Posts: 799
Registered: ‎09-27-2011
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Re: AMEX FR after having my Zync for 2 Weeks


n777ua wrote:

This may be a dumb question; but how would requesting a tax transcript trigger a potential IRS audit ? IE if Amex feels the OP is lying about his income/circumstances won't they just close the account ? I guess I can't see them calling the IRS and saying "hey, check this guy out".  I agree the OP should just close the account, but I"m not sure why I see he/she should be so afraid of an IRS audit ? 


Isn't there something in The Credit Card Accountability Responsibility and Disclosure Act of 2009 relative to income reporting and ability to pay? I could be wrong so someone please clarify if I am misunderstanding CC responsibilities here.

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Crashem
Posts: 3,098
Registered: ‎01-26-2012
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Re: AMEX FR after having my Zync for 2 Weeks

If you are referring to card act, there is language about approving based on only the cardholder's ability to pay. That language was what made student credit cards much harder to obtain as students would need a documented source of income to qualify. The difficult thing about Amex vs other lenders when it comes to documentation is that they aren't asking for tax transcript. They are asking for permission to talk to IRS to get your tax transcript. Not sure on their responsibilities vis a vi the law if they detect potential tax fraud.
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Valued Contributor
oracles
Posts: 1,699
Registered: ‎08-18-2007
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Re: AMEX FR after having my Zync for 2 Weeks

closed the account, you dont need the hardaches

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variableResistor
Posts: 41
Registered: ‎05-26-2012
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Re: AMEX FR after having my Zync for 2 Weeks

Ask your bank to send AMEX a verification of deposit form. This is a form that will include all your bank balences.

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