The Gig Economy Taxes
Gig workers can deal with some complex tax issues, as one U.S. Tax Court case illustrates. In the case, a taxpayer maintained an account in his name with a ride sharing company. He provided rides to customers and recruited others to use his account to do the same. They rented his vehicles, which he purchased using car loans or at auctions, and he paid them with money the company deposited into his bank account.
For the year in question, the IRS argued that he failed to report gross receipts of over $540,000. He also didn’t maintain proper records for payments to the drivers and their expenses. The court upheld the IRS determination of unreported income. (TC Memo 2021-79)