IRS & Tax Collection

[Brianna31]

So, we have a small airbnb cabin on the river in Iowa. We have been contacted by the IRS several times now stating that our taxes are not being filed and paid. I have contacted airbnb at least a dozen times and they assure me that our taxes are filed and paid in a lump sum with the other accounts in our area. The IRS is levying our bank account to pay these taxes (back to March 2020) and Airbnb is also keeping the portion of taxes from each reservation, so we are double paying. I checked our tax info through Airbnb and everything is there. Has anyone else had this issue or know how to correct it? My friends with Airbnb accounts have not run into this.

I'll take any advice I can get!

Thanks,

Bri

[Lisa723]

@Brianna31 Airbnb pays (some, not all) state and local lodging and sales taxes. To my knowledge, Airbnb does not collect, withhold, or pay state or federal income taxes, which would be the concern of the IRS-- unless you have failed to provide your taxpayer information.

https://www.airbnb.com/help/article/510/taxes-and-payouts

It sounds like you need a CPA.

[Michelle53]

@Brianna31   As @Lisa723  mentioned, Airbnb collects some local and sales taxes and submits them in a lump sum to those localities.  The Airbnb owner may still have to file returns with their state or locality based on the tax infomation provided under Earnings and Transaction history, showing their earnings and the share of the taxes paid.

You mention the IRS though. They are only concerned with Federal Income Taxes, filed annually. Only state or local  departments of revenue will ask for monthly or quarterly return filings. You probably need to go back and file those. 

You may need to contact a professional to help you.

[Kia272]

@Brianna31  What both @Michelle53 and @Lisa723 said is correct. AirBnB wouldn't have anything to do with collecting federal taxes. They are collecting whatever local and state lodging and other taxes are owed to your municipality. They certainly aren't submitting any kind of tax revenue to the IRS.

Did you file a Schedule E with your tax return? That's the schedule for rental properties. If you didn't, it means you didn't report the income you made, and that's why the IRS is calling. 

It must be a substantial amount if they are levying your bank account. 

A CPA or Enrolled Agent should be able to help you with this. 

[Lisa723]

@Kia272 according to the article I linked above, Airbnb will withhold and remit federal income taxes if (and only if) the host does not submit their taxpayer info. Of course, not at all clear whether that applies in this case.