This Daily Tax Tip Spotify Podcast and/or WordPress Blog Post discusses when an Uber Driver is Taxed on Amounts Earned by Others Driving Under His Account.
In Nurumbi v. Comm’r, T.C. Memo. 2021-79, the Tax Court held that a taxpayer who earned income by driving for Uber and by having others drive for Uber under his account had unreported income of more than $540,000 based on the amounts reported to him on the Forms 1099-K and 1099-MISC (see Code Section 61).
While the court allowed a deduction for amounts the taxpayer paid to the other drivers from his Uber-connected bank account, it determined there was no documentation on which to estimate how much the taxpayer paid out to the other drivers in cash and therefore the taxpayer was not entitled to a Code Section 162 deduction for such cash payments.
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TB Income 07182021-01 404-257